Payroll compliance is one of the most important, and most challenging, aspects of running a business. Evolving federal, state, and local laws, shifting court rulings, and emerging regulatory trends mean that employers must be more vigilant than ever.
In a nutshell: payroll compliance means doing payroll in a legally correct, timely, and well-documented manner to avoid penalties, audits, and legal exposure.
More deeply, the term “payroll compliance” refers to an employer’s obligation to follow all applicable laws, regulations, and administrative rules governing how employees are paid, how withholdings are managed, how records are maintained, and how tax and reporting responsibilities are met. It encompasses federal, state, and local requirements—everything from Social Security and tax withholding to overtime, minimum wage, wage garnishment, and recordkeeping.
At a high level, maintaining payroll compliance requires execution (and continuous oversight) of several core tasks. Some primary tasks include:
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