Page 124 - Essentials of Payroll: Management and Accounting

Payr oll Best Practices
much vacation time they have left to use.When employees are constant-
ly coming in to find out this information,it is a major interruption to the
payroll staff, because it happens at all times of the day, preventing them
from settling down into a comfortable work routine. When numerous

employees want to know about their vacation time in a single period, it
can mean a considerable loss of efficiency for the payroll staff.
A simple way to prevent employees from bothering the payroll staff
is to include the vacation accrual amount in employee paychecks. The
information appears on the payroll stub, showing the annual amount of
accrued vacation, net of any used time. By providing this information
to employees in every paycheck, they have no need to inquire about it

in the payroll office, thereby eliminating a major interruption to staff.
There are, however, several points to consider before implementing
this best practice. First, the payroll system must be equipped with a
vacation accrual option. If not, the software must be customized to
allow for the calculation and presentation of this information, and this
may cost more to implement than the projected efficiency savings.
Another problem is that the accrual system must be set up accurately
for each employee when it is originally installed; otherwise, there will
be a number of outraged employees crowding into the payroll office,

causing more disruption than was the case before. This is a problem
because employees have different numbers of allowed vacation days per
year, or may have unused vacation time from the previous year that
must be carried forward into the next year. If this information is not
accurately reflected in the automated vacation accrual system when it
is implemented, employees will hasten to the payroll department to
have this information corrected at once. Another problem is that the

accruals must be adjusted over time to reflect changes. Otherwise, once
again, employees will interrupt the staff to notify them of changes,
thereby offsetting the value of the entire system. For example, an

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