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To you, their salaries are just a line item in the budget. To your employees, they’re much more. Employee Payments can be very complicated process for some. If you don’t know how to pay employees correctly, you can run into problems with employees who don’t receive the pay they expect and with your state and federal employment laws. In this article, we’ll look at how to pay these employees correctly and what are the current best practices.

There are two types of pay which an employer considers for their work:

Wages and salary: Wages and salary are commonly known as base pay. Base pay is the foundation of total compensation because it establishes the standard of living for employees.

Variable Pay: Like the name suggests the pay is not fixed for every month or annum, the changes are based on the Type of Variable Pay which includes: – Overtime, Incentives, Achievement Prizes etc.,

Employee Compensation: Best Practices:

Clarity about what to stand for: When we’re trying to learn a new skill, it’s ideal to be able to practice before we have to actually execute. Managing people doesn’t work that way. Therefore you need to be sure before execution.

Performance: Employee payment should be in line with performance, which is best tracked through regular, formal appraisals.

Wages Statements and Employee Payments:

Keeping track of your records is very important and a very good practice. A statement of the Wages is also essential and is important for Payroll Professional. ESA requires you to keep these.

The main two important functions are as follows:

  • It shows transparency in Payroll.
  • It shows that the employer is in compliance with ESA.

Payroll RecordMany employers believe that it is not a requirement to keep records of hours worked by managers or salaried employees. This is not true. The act requires that such records be kept by employers for all employees.

Research Wages: A research in the market of what others are paying for that position is also important as it offers competitive salary for you to give to your employee’s. These will help you keep in pace with the industry standard.

Best Practices for Vacation Pay:

Best practices means decreasing the hassles of administration and improving accuracy and compliance. Many employers provide vacation pay by period, on that period’s ‘vacation able’ pay.

Every Employee may or may not take vacations differently than each other.

Where employers approve the vacation pay of employees, they sometimes pay it out all together once a year or cash it out, without taking much time. Other employees reduce vacation pay payments by using currently applicable hourly rates for the time that has been taken.

In addition, exempt employees can be held to working a certain number of hours per week. Again, the issue is that these employees cannot have their pay docked if they do not work those hours. However, failing to adhere to their specified work schedule can be addressed as a disciplinary issue.



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