While payroll can sometimes been seen as a function of a business’s finance department, often human resources (HR) is part of the process, as well. HR oversees the people who make up a business’s workforce, including full-time employees and 1099 subcontractors. Because of this, if there is a problem with the payrolling process, HR is the first place a worker will visit.
Dividing the Workload
While HR has a heavy hand in making sure workers are set up in the system and time is keyed accurately, the actual process of processing payment falls under the finance team. The HR team keeps the official record of each employee’s rates and makes changes as necessary, but they have little to do with the actual payment. Because many businesses now handle all of this using an automated system, each group can do its work completely independently of the other, with it all coming together in the system.
Verification of Time Worked
While the finance department may be responsible for issuing payments, they issue this contingent on the information provided by HR agents. If an error happens in processing payments, it will be traced to determine whether the error happened in accounting or HR. In some instances there may be a misclassification that has led to an employee being overpaid or underpaid.
Finance may also need HR’s assistance in gathering necessary documentation required for filing with the IRS. While the financial portion of this is handled by finance and accounting, HR is the first line of contact for employees, which means the HR team is responsible for gathering all the forms necessary to satisfy tax requirements.
A business’s finance team handles the actual processing of payroll, but the HR department is necessary for validation of an employee’s time and pay rate. When errors happen, HR personnel may be held accountable if the error occurred on their end.