The risks of poor payment of employees

By Allision Kraft

If you are a small business owner who thinks that the only disadvantage that comes from paying people incorrectly and not on time is that you will be given grief by disgruntled employees, then think again.

Paying staff properly does not only have a moral obligation but it has legal implications too because you are effectively in breach of contract if you fail to pay your staff.

If you think you can’t afford to pay your staff on time now or maybe you are too lazy to make it a priority, then consider the expenses and the work involved in dealing with a court case. The fact is that your employee or employees are entitled to take you to court over non-payment of wages.

This is not the only way that you can run into trouble over the payment of employees. Inaccurate payments of tax or national insurance have implications too. Unless you manage a team of freelancers, you, as employer, are liable to pay for your staff’s tax and national insurance contributions. Failure to do so means that you could end up in tax arrears – leading to fines – and also means that your staff could face problems with their pension payments in later life.

An instant problem of not paying staff, which cannot be fixed with the payment of a fine, is the effect that it has on morale of the workforce and the respect, trust and quality of the relationship between staff and business owner. There are few insults greater than not paying staff, and few insults that have such a direct impact on the lives of staff and their families.

If you really feel unable to manage paying staff on time then you should consider adopting one of the payroll solutions offered by a payroll company. A payroll company that deals with small businesses will be well-placed to help you, and will help you find the right payroll solutions for you, your team, and your finances. Perhaps the risks are too great to go it alone?

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