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When the Standard Pay Statement Isn’t Enough

For many companies, the standard pay statement they get from their payroll provider contain everything they need. But in a growing number of situations, the standard pay statement isn’t enough.  

Since the pay statement is the most regular form of communication between a company and its employees, it’s an effective vehicle for sharing important or timely information. Pay statement customization has become more common as organizations have looked to add new messaging, information specific to certain employee groups (e.g., commissions and union pay), and even legally required formatting in states such as California.

Pay statement customization is especially prevalent among growing businesses with operations in multiple states, different types of employee populations or when an organization goes through frequent mergers and acquisitions. However, any company might explore it as an option to improve its employee communications. Let’s look at some of the most common reasons for using custom pay statements.

1. Managing multiple brands, as a result of expansions, mergers, or acquisitions

It’s common for organizations to include multiple brands and associated businesses under one parent company. To cite perhaps a too-obvious example, Disney owns the Marvel, Pixar, Lucasfilm, and National Geographic brands in addition to its own. These brand identities, down to the color and fonts used for each one, are all carefully maintained.

On a smaller scale, it’s possible that the different business units within a company will need their own custom pay statements to reflect their distinct operations and brands. An SMB expanding into a new market via merger or acquisition could find itself in such a scenario.

Companies can deliver multiple pay statement formats to meet unique organizational requirements if they work with the right provider. For example, their logos and color treatments can also be tailored to the requirements of each entity.

2. Adding company-specific information to meet industry-related requirements

In sectors such as manufacturing, entertainment, and media, pay statements may need to include details that wouldn’t appear on a standard statement.

In manufacturing, for instance, some businesses pay their employees based on the number of components they build over a certain time period. So, someone who is assembling a particular part on a vehicle assembly line might be paid at a different rate for it than another component. That disparity needs to be reflected on the pay statement.

Similarly, a person working on a film or TV show could potentially participate in numerous productions over the course of a year. Their pay statements could be customized to break out exactly how many projects they contributed to and how they were compensated for each of them.

diverse employee workforce

3. Meeting the needs of different employee populations

Employees can be paid in a variety of ways. In addition to the relatively common arrangements of hourly or salaried pay, some workers also receive commissions.

These payments can vary significantly based on the size of sales deals. Accordingly, it’s important to keep records of the amounts so that employees know why they’re receiving extra money, and how much.

Union-based pay is another consideration when creating customized pay statements. Unionized employees may pay dues and receive union-based benefits like healthcare. These payments can be indicated in the pay statement so that employees know what they’re regularly getting from their unions.

4. Complying with regulatory requirements

Pay statements must meet strict legal requirements for formatting and content in some jurisdictions. California is probably the best example.

Employers with California-based employees must comply with the Golden State’s statutes on wage statements for employees. Regardless of whether an employee is paid by check, cash, or direct deposit, they are entitled to a written and itemized pay statement.

Mandatory details include dates, gross and net pay, piece-rate units (if applicable), all deductions, and all hourly rates and the number of hours worked for each of them. Some employers may struggle to create a California-compliant wage statement, especially if their operations are mostly elsewhere and they’ve defaulted to a non-California-style statement. This is where having the flexibility to customize multiple pay statement formats can help.

From a regulatory standpoint, employers need to maintain historical records of pay statements for several years, in a specific format. Custom pay statements make it easier to meet these requirements than relying on standard payroll provider formatting.

Add custom messaging to pay statements

5. Including custom company messaging

As we pointed out earlier, the pay statement is oftentimes the most standard form of communication between employers and employees. That makes it an efficient way to send important information (some of which may even be legally required, as in California statements) to employees beyond just how much pay they received at a specific time.

Key additional details might include:

  • Current PTO or sick day balances.
  • 401K plan information and disclosures.
  • Open enrollment dates and reminders.
  • Other info as required, e.g. for purposes of a legal settlement.

6. Other Miscellaneous Use Cases

Beyond the five listed above, custom pay statements can fulfill a few other purposes. They can be tweaked to include explanations and descriptions of each line item within a statement. Also, they may be configured to cover an unusual/longer period of time due to a combination of the customizations listed above.

How to deliver customized pay statements

Let’s say you’ve determined you need customized pay statements. What are the next steps?

First, you should identify all the specific information needed for the particular employee groups across your organization. Determine where these employees are located and if you will need multiple customizations for different teams. Then think about how you might format it in pay statements, and how the new statements will differ from what you are currently getting from your payroll provider. Finally, think about which partners to work with on your customization project. CIC Plus has proven experience helping organizations tailor their pay statements to the specific needs and requirements of their workforces. Learn more  or contact our team for more information.