Kronos: 82M Americans have experienced errors with their paychecks
- A study by the Workforce Institute at Kronos, a nonprofit think tank addressing human capital issues, revealed that 54% of Americans (totaling 82 million people) experienced paycheck errors.
- The results showed that 87 million Americans admit to living paycheck to paycheck. Paycheck errors further exacerbate problems for Americans waiting on their next paycheck to come in; 37% of survey respondents said errors forced them to pay their mortgages, car loans, credit cards and other expenses late.
- The study examined pay problems among salaried, hourly and gig workers, and found that gig workers faired the worst, with 20% having been underpaid and 20% having been paid late. The study also revealed that 13.5 million workers have been overpaid by an average of $463.80 before reporting it to their employers.
The rate of paycheck errors is alarming, based on the study results. Employers might need to scrutinize their payroll systems more closely, whether they are operated internally or outsourced. Periodic audits to uncover any patterns of discrepancy might be necessary.
Hourly workers especially suffer when payroll mistakes occur. The problem is made even worse by the fact that 36% don't even log their hours to begin with, according to recent data. The potential for overtime rule changes could complicate that situation.
A not-too-surprising study result was that 42% of respondents find their pay stubs confusing and that taxes and deductions were hard to understand. It’s likely the problem is prevalent in most workplaces. Nearly 45% of respondents said they’d be more engaged with their employer if they could better understand how taxes and deductions affect them.
Expecting employees to understand every line and entry on their pay stubs isn’t realistic. To help minimize the problem, employers might explain pay stubs and taxes and deductions in onboarding packages or presentations.
There are also a variety of software solutions to help combat common payroll issues. On a related note, cybersecurity should be top-of-mind when dealing with payroll, as various W-2 phishing scams have cropped up during this year's filing season.