New Workforce Institute at Kronos Survey: Payroll Problems Affect 82 Million American Workers

CHELMSFORD, Mass.–(BUSINESS WIRE)–#Engagement–As Americans file their Form 1040 U.S. Internal Revenue Service (IRS)
income taxes ahead of the April 18 deadline, a new survey from The
Workforce Institute
at Kronos
Incorporated
reveals an estimated 82 million1 Americans –
more than half of the U.S. workforce – have experienced a problem with
their paycheck during their career. The survey also finds payroll errors
cost both employees and employers more than just dollars and cents.

The “Engaging Employees through Payroll” survey examines the hidden
costs of payroll errors and explores the vital role payroll
professionals serve in building an engaged workforce while directly
impacting the 152 million2 workers who make up the American
workforce.

News Facts

  • Paid too little, too late, or not at all: 54 percent of Americans
    have had a paycheck problem, while salaried, hourly, and gig (i.e.
    freelance / contract) workers each face different challenges.

    • More than a quarter (26 percent) of hourly workers have been paid
      too little, while 15 percent say they’ve been paid late. Just one
      in 20 – six percent – have been overpaid.
    • For the salaried worker, 15 percent say they’ve been shortchanged
      in their check. Although 16 percent report being paid late,
      another 23 percent say they’ve been paid early – a nice problem to
      have! Nine percent have had a paycheck bounce, though, which is
      more than hourly and gig workers combined.
    • While still a small group, gig workers might be the toughest to
      pay correctly. One in five (20 percent) have been paid late; one
      in five (20 percent) have been paid too little; and 16 percent say
      they’ve had their paycheck direct deposited into the wrong account.
    • Overall, at least 10.6 million3 workers (seven percent)
      have had a paycheck bounce.
  • How much ‘extra’ cash would you pocket? More than 13.6 million4
    American workers report being overpaid
    and not everyone
    scrambles to return it.

    • The survey found, on average, American workers say they must
      likely be overpaid a staggering $463 before alerting their
      employer to the mistake.
    • It would take more, on average, for salaried employees ($735) to
      alert their employer if they were overpaid versus hourly workers
      ($160).
    • Men may be more dishonest than women – over two-times more, in
      fact – as men, on average, would pocket $623 extra before saying
      something, compared with $258 for women.
    • Employees can’t claim they didn’t notice the error: more than
      three-quarters (77 percent) of Americans check their paystub every
      payday to make sure their taxes, withholdings, and overall
      earnings are correct.
  • Living paycheck-to-paycheck makes payroll errors costlier: 56
    million
    5 American workers have paid a personal bill
    late because of a payroll error.

    • Almost three out of five employed Americans – 58 percent or 87
      million workers and their families – live paycheck-to-paycheck,
      according to the survey, while hourly employees (65 percent) are
      more likely than salaried employees (52 percent) to report this.
    • Payroll errors have forced over one-third (37 percent) of American
      workers to make a late payment on a bill such as their car loan,
      credit card, mortgage, or apartment/home rent.
    • Salaried employees (45 percent) are more likely than hourly
      employees (29 percent) to have made a late payment because of a
      payroll error.
  • Perplexed by paychecks: Almost 64 million6
    Americans say their paystub is hard to read.

    • The survey discovered 42 percent of all employees say taxes and
      deductions on their paycheck are confusing to read and understand.
    • Year-end tax forms confuse American workers, too. While half say
      they’re confident they have never had a problem with documents
      such as an IRS W-2 Form, 35 percent of employees have had a
      problem such as a mistake. Another 15 percent admit they do not
      understand their tax forms enough to even recognize an error.
    • Nearly half of American workers (45 percent) say they would feel
      more engaged with their job if their employer helped them better
      understand the impact of taxes and deductions on their overall
      earnings.

Supporting Quotes

  • Joyce Maroney, director, The Workforce Institute at Kronos
    “Payroll
    professionals support more than 152 million American workers every
    payday – and their efforts often go underappreciated. For
    organizations seeking to gain an edge in their employee engagement
    initiatives, the payroll department is a valuable resource capable of
    making a vital and instant impact. To unlock payroll’s true potential,
    it must be relieved of the burden created by outdated, manual, and
    often spreadsheet-based processes. Providing modern tools and
    technology will not only reduce the number of costly and potentially
    engagement-ending errors, but it will allow payroll experts to excel
    as true knowledge workers capable of taking on a more strategic and
    proactive role in supporting organizational transformations.”

Supporting Resources

About Kronos Incorporated
Kronos is a leading provider of
workforce management and human capital management cloud solutions.
Kronos industry-centric workforce applications are purpose-built for
businesses, healthcare providers, educational institutions, and
government agencies of all sizes. Tens of thousands of organizations —
including half of the Fortune 1000® — and more than 40
million people in over 100 countries use Kronos every day. Visit www.kronos.com.
Kronos: Workforce Innovation That Works.

Survey Methodology
Please cite the above research as the
“Engaging Employees through Payroll” survey conducted by The Workforce
Institute at Kronos. This online survey was conducted by Regina Corso
Consulting on behalf of The Workforce Institute at Kronos between Feb.
23-28, 2017 among 1,013 employed U.S. adults, aged 18 and older. Figures
for age, gender, education, income, and region were weighted to bring
them into line with their actual proportions in the U.S. population.
Because the sample is based on those who agreed to participate, no
estimates of sampling error can be calculated. For more information on
the survey methodology, please contact daniel.gouthro@kronos.com.

Footnote 1: Calculation based on the U.S. Bureau of Labor Statistics
report from January 2017 that estimates there are 152.08 million
employed people in the U.S.: 152.08M x 54% = 82.12 million.

Footnote 2: Per the U.S.
Bureau of Labor Statistics report from January 2017
, there are
152,081,000 million employed people in the U.S. (Page 4, Summary Table A)

Footnote 3: Calculation based on the U.S.
Bureau of Labor Statistics report from January 2017
 that estimates
there are 152.08 million employed people in the U.S.: 152.08M x 7% =
10.64 million.

Footnote 4: Calculation based on the U.S.
Bureau of Labor Statistics report from January 2017
 that estimates
there are 152.08 million employed people in the U.S.: 152.08M x 9% =
13.68 million.

Footnote 5: Calculation based on the U.S.
Bureau of Labor Statistics report from January 2017
 that estimates
there are 152.08 million employed people in the U.S.: 152.08M x 37% =
56.26 million.

Footnote 6: Calculation based on the U.S.
Bureau of Labor Statistics report from January 2017
 that estimates
there are 152.08 million employed people in the U.S.: 152.08M x 42% =
63.87 million.

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logo, and Kronos Workforce Ready are registered trademarks and Workforce
Innovation That Works is a trademark of Kronos Incorporated or a related
company. See a complete list of Kronos
trademarks
. All other trademarks, if any, are property of their
respective owners.

Contacts

Kronos Incorporated
Dan Gouthro, +1-978-947-7310
Daniel.Gouthro@kronos.com