Posts Tagged ghost employees

Do You Have Ghost Employees on Your Payroll?

No, we’re not implying your business is haunted and you’re paying salaries to spirits that may be hanging about. But your business could possibly have ghost employees of a different sort that you may not even be aware of if you don’t diligently monitor your company’s payroll.

Last year, Iraq’s new government found out they had 50,000 ghost soldiers on their payroll. These were actual soldiers who paid their officers a portion of their salaries and then didn’t show up for duty. Not only did this practice make their commanders richer, but it also weakens the country’s military force, leading to the ISIS takeover of Mosul.

If you’re thinking, “Well, that was Iraq. Something like that doesn’t happen in businesses in the U.S.” Think again. Just this year, a man who worked at the Knox County, TN, Trustee’s Office was jailed for fraud after he collected roughly $200,000 – four years’ worth of paychecks that he didn’t actually work for and yet received.

Ghost employees are not just found in "other" companies.Unfortunately, ghost employees can exist within your company:

  • A manager hires a nonexistent employee, then deposits the paychecks into a bank account he/she has set up.
  • A payroll clerk leaves a terminated employee on the payroll, then keeps the paychecks to cash for personal use.
  • An H.R. employee sets up personnel and payroll files using social security numbers of people who have died and collects the salaries.
  • A vice president hires a son who never or rarely shows up to work, but still pockets the paychecks.

However, you can safeguard your company against payroll fraud – saving your company thousands of dollars in damages. By hiring a payroll services provider, like The Payroll Department, to handle your payroll, we can provide your company with another check and balance to your payroll processing system. If an employee is stealing money through your payroll, it would become more difficult if The Payroll Department was monitoring your payroll.

In fact, The Payroll Department requires all the paperwork of your employees and makes all the deposits for your payroll. If more than one paycheck were deposited to the same checking account, The Payroll Department would catch it and make you aware of the potential problem. Also, The Payroll Department notes all the social security numbers of your employees when making tax payments, so they’re more likely to detect duplicate numbers.

If your business doesn’t have checks and balances in place for your payroll, you could be setting your company up to be the victim of fraud. But, by outsourcing your payroll services to a third party group, like The Payroll Department, you can eliminate the possibility of ghost employees haunting your payroll. Call us today for more information.

– Ariane of The Payroll Department blog team

Posted in: Operating a Small Business, Payroll Processing

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