Page 49 - Essentials of Payroll: Management and Accounting

ESSENTIALS of Payr oll: Management and Accounting
terminated for cause. Also, note whether both the reviewer and
the employee have signed a review; if either one is missing,
obtain these signatures if possible, so that additional proof of
employee receipt is made.
• Garnishment information. If there are court orders for garnish-
ing an employee’s pay for any reason (e.g., tax levies, creditor
levies, child support, or alimony) include a copy of each one
in the folder.
• Tax-related information. Tax deductions can only be made
from an employee’s wages if prior written authorization has
been made by the employee. The employer should retain
proof of these requests (nearly always in the form of a W-4
form) in the folder.
It is absolutely essential that the entire set of personnel files for all

employees be kept under the strictest security at all times. These files
contain potentially damaging information about employees, such as job
reviews, medical information, or court orders that could be embarrass-
ing or job-threatening if the information were to become public
knowledge. Employees rely on the employer to keep this information
confidential, and the employer should meet this expectation.

Payroll Change System

There will be changes in employees’ lives that require them to ask for
alterations to the information used to create their paychecks. For exam-
ple, an employee may have a baby, which requires an alteration in that
person’s medical insurance from two adults (which is at one price) to a
family plan (which is at another price); this change will probably
require a different payroll deduction for the employee’s portion of the
insurance expense, which must be reflected in his or her paycheck. As

another example, an employee might be diagnosed with a long-term
medical problem that will require a great deal of medication, so this

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