Payroll - Case Studies
A business was operational for 24 hours a day. There were two owner-employees reported on the payroll as employees. The business was indirectly stating that each employee was working 12 hour shifts all 7 days of the week for 365 days. The fixed salary for the owner employees did not match up to the minimum wage for the number of hours operational for the business.
Krishnan company began processing payroll for the client when they switched to our services. We analyzed the information that the client provided in order to begin processing the information when we noticed that for the number of hours the store was open the minimum wages did not coincide. We notified the client to raise their salaries or hire additional people otherwise this would be grounds for concern. We then proceeded to advise him on the next steps. The client made sure that the working hours were distributed evenly amongst the employees and hired new employees.
Situations like this warrant further scrutiny by federal organizations. Had the client been audited, it could have been contested that this business required more than two employees considering their business hours and duties involved. This would have caused huge penalties and interest to the client. At Krishnan Company, we don't just process your payroll we perform a thorough analysis and advise the client appropriately.