Top 5 Payroll Mistakes

Top 5 Payroll Mistakes Charter Schools Make

 

  1. Misclassifying Employees by Job/Duties & Appropriate Pay (Hourly vs Salary)
  • Any teacher must be legally credentialed in California.
  • Teachers and administrators are exempt from overtime – most other salaried positions may NOT be exempt from overtime.
  • For year 2020, each exempt employee must receive at least $4,506.67 per month during each month worked. If they work less than 12 months, the annual amount they’d get paid should be less than $54,080 (12 x $4,506.67). Exempt monthly wage for each month worked, not an annual amount.
  • Keep salaries in alignment with standard pay for the position filled.
  • Assure that all employees receive meal and rest breaks in conformance with State and Federal laws.

 

  1. Exempt Employee Mistake: Miscalculating Final Pay
  • California Education Code calculation for contract employees does NOT apply to Charter Schools. This standard calculation divides contract salary by number of workdays and pays for days worked, but not yet paid for.
  • Proper calculation for contracted employees is to pay for the current contract month (or portion thereof) not yet paid to the employee. Here is a breakdown:
    • The pre-determined monthly salary is multiplied by 12 to find the yearly salary.
    • The product of that multiplication is divided by 52 (the number of weeks in a year) to find the weekly salary.
    • The usual number of days (regardless of the number of hours usually worked in any workday) the employee is scheduled to work in a workweek is divided into the weekly salary.

 

  1. Errors in Pay for Hourly/Salary Employees
  • Hourly timekeeping must be recorded accurately.
  • Meal and rest periods must be in conformation with State and Federal laws.
  • Reason for stipends must be identified.

 

  1. Payroll Timing Not in Conformance with State or Federal Law
  • Wages earned between the 1st and 15th days, inclusive of any calendar month must be paid no later than the 26th day of the month, during which the labor was performed. Wages earned between the 16th and last day of the month must be paid by the 10th day of the following month.
  • Other payroll periods, such as weekly, biweekly, or semimonthly (twice per month), must be paid within seven calendar days of the end of the payroll period within which the wages were earned. (This applies if the earning period is something other than between the 1st and 15th, and 16th and last day of the month).

 

  1. Improper Deductions and Offsets
  • Under California law, an employer may only lawfully deduct the following from an employee’s wages:
    • Deductions that are required of the employer by federal or state law, such as income taxes or garnishments.
    • Deductions expressly authorized in writing by the employee to cover insurance premiums, hospital or medical dues or other deductions not amounting to a rebate or deduction from the wage paid to the employee.
    • Deductions authorized by a collective bargaining or wage agreement, specifically to cover health and welfare or pension payments.