What is one potential legal issue that can arise from non-compliance in payroll practices?

Non-compliance in payroll practices can lead to significant legal issues, one of which is unpaid overtime claims. In many jurisdictions, labor laws require employers to pay employees for all hours worked, including overtime for hours that exceed a certain threshold. When an employer fails to adhere to these laws by not properly compensating employees for their overtime work, this can result in claims against the company.

Workers who have not been paid their rightful wages may seek legal remedies, which can include back pay for unpaid hours, potential penalties, and even interest on the amount owed. This situation can escalate to lawsuits, causing financial strain on the company due to legal fees and settlements. In addition, non-compliance can also damage the employer's reputation, making it harder to recruit and retain talent, and potentially leading to further scrutiny from regulatory bodies.

The focus on unpaid overtime claims highlights the importance of ensuring that payroll practices are compliant with legal standards, as failure to do so can have serious repercussions for both the employees and the organization.