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How to Prepare Payroll for a Disaster

Author: Vicki M. Lambert, The Payroll Advisor

Devastating disasters of the 21st Century, such as the Coronavirus pandemic, hurricanes Sandy and Maria, massive wildfires in California, the 9-11 terrorist attack and workplace shootings, have forced payroll professionals to recognize that a sensible and cohesive business continuity plan is a critical part of their immediate and long range planning. Whether a disaster is caused by nature, humans or a technological glitch (e.g., computer viruses, power outages), any business disruption can affect payroll processing. The resulting delay in paying employees and other payees can expose an employer to penalties and fines for failure to report and remit payroll taxes or adhere to wage and hour laws.

Although when natural or other disasters affect a portion of the US the IRS and the taxing agencies of the affected states usually provide employers with tax filing and payment extensions, these agencies do not forgive interest for late deposits or reports. Therefore, payroll professionals have good reason to do everything possible to ensure that business can continue as normally as possible during disasters.

This How To will help an employer to establish, maintain and implement a plan to keep payroll operational during a disaster.