The construction industry may well be at the top spot if we were to rank industries on the basis of complexity in compliance. It is easy to assume that the sector follows very simple workflows, and hence compliance shouldn’t be too much of a problem. But the reality is far from this notion!
Many areas within the construction sector have a lot of dependencies to be addressed to ensure compliance. The biggest problem area in this regard is payroll processing.
While some companies have moved away from the traditional spreadsheet or Excel-based payroll system to modern applications, many aren’t fully aware of the needs that payroll processing software must address.
How can a construction company evaluate whether its payroll processing system is the right fit to ensure compliance needs are met?
It will be difficult to answer this question directly because there are several focus areas where a payroll processing system must enable better compliance. The best way to arrive at a conclusion would be to ask yourself the following questions about the payroll system:
Does Your Payroll Software Guarantee Compliance Diversity?
As you are aware, the construction sector in the US deals with a plethora of compliance norms in payroll. Workers deployed on projects funded by government authorities have to follow the rules like the Davis Bacon Act. Similarly, frameworks like Fair Labor Standards Act (FLSA) exist to protect the rights of employees. Payroll processing systems need to have automated compliance with all popular construction rules and frameworks prevalent in the jurisdiction the firm operates. This is a critical feature to look out for when deciding on a payroll processing system.
Are You Paying Your Unions More Because You Don’t Have the Right Calculations for the Fringes?
The construction sector workforce is one of the most unionized streams of employees. Adhering to the terms and conditions of unions with respect to employee pay scales is critical in ensuring a regular supply of skilled labor. But for this to happen, your payroll system must be capable of not just regular payroll processing but also handling unique requirements like deductions for items like pension funds, union membership fees, political contributions, and much more.
It is vital to ensure that the payroll solution selected has the ability to automate calculations and adapt employee payroll to different union wage and benefit structures.
Do Your Employees Have a Self-Service Portal To Access Their Payroll Details?
In the digital era, construction employees must be able to exercise different privileges like availing of leaves, accessing their payroll details, and configuring their financial and administrative details on their own without manual paperwork. This is where construction companies must evaluate whether their Advanced Payroll Software provides self-service capabilities to handle such requirements from employees.
Moreover, this feature of accessing payroll and other data must be possible from anywhere and anytime the employee chooses to do so. This can be realized if businesses opt for a cloud-based construction payroll solution.
Does Your Payroll Solution Offer Customized Reporting?
The essence of compliance lies in how effectively construction companies can produce reports on different employee payroll initiatives on demand to be audited by respective government bodies. On this note, it is good to ask yourself whether your payroll processing software can customize reports based on factors like pay scale, union rights, tax codes, state or regional customizations, and much more.
Every report generated serves as part of the overall compliance challenge that a construction company must endure over its lifecycle. Thus, custom reporting should also be guaranteed for adherence to unique nuances in the construction sector and not be considered from a general payroll processing perspective.
Does Your Payroll System Protect Sensitive Information?
Construction companies should treat data about employees with the highest level of confidentiality and ensure that privacy checks are in place for their payroll systems. Provisions like access control, cloud-native threat detection, response, encryption, etc., need to be provided to ensure that employee data never falls into the wrong hands.
The Way Forward
Modern digital payroll processing systems can help construction companies digitize their operations. But that doesn’t mean that any payroll solution available in the market can address all challenges that the industry faces. Remaining compliant with industry norms, government regulations, and wage practices is critical in ensuring a sustainable growth trajectory for any construction business. The digital payroll solution selected must be able to contribute significantly to this front.
This is where CEM can be the best partner for the digital transformation of the construction payroll department. Our state-of-the-art cloud payroll processing solution ticks the boxes for all the questions raised in this blog and still has much more to offer. Schedule a demo to explore our solution in detail and learn how it can drive a major transformation of your payroll process while remaining compliant.