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What Does a Compensation Administrator Do?

By Jan Fletcher
Updated May 17, 2024
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A compensation administrator job usually involves hands-on processing of payment paperwork, entering and extracting data, and providing administrative support to a business or organization. Someone in this position usually interfaces with information management systems, entering and extracting the data needed to deliver compensation in a timely and accurate manner. A compensation administrator may also work with the organization's procurement staff to ensure payment is rendered to contractors or suppliers. In addition, he or she may be responsible for verification of changes affecting payroll. Those who work in this position may also handle various outside inquiries or requests that involve individuals who receive compensation from the administrator's firm.

This job position usually involves numerous clerical tasks geared toward ensuring the firm's labor force receives timely compensation. A major responsibility for a compensation administrator is completing a timely, accurate dispersal of payments to those who work for the organization. Before a payment can be issued, a company or organization is typically expected to comply with many compensatory laws and reporting requirements. The compensation administrator may handle these procedures personally, or assign tasks to those who report to him, depending on the size of the organization. Recording changes in the company's workforce that involve new hires and terminations is also a typical task for a compensation administrator.

Accurate data entry is always a highly prized attribute in compensation dispersal, as workers will likely be distressed in the event of underpayment. Timeliness in task completion is also highly valued. This is for several reasons, including maintaining morale among a firm's workforce, and avoiding what may be numerous penalties that could be levied against a company for not remitting timely payment to employees. It is for these reasons that a compensation administrator will likely be recruited or retained based upon performance in timely and accurate data entry and extraction.

Sometimes a compensation administrator will be expected to handle procurement payments submitted by vendors. Although these types of payments may not necessarily fall under the laws that protect and enforce fair labor practices and compensation, accurate administration of compensatory practices is still highly valued. Late or incorrect payments to vendors may result in the loss of a supplier, or even court action undertaken to recover a bad debt. In some companies, the compensation administrator's time may be tapped for various other duties, as the same set of skills may be valuable to his or her employer in other areas.

A compensation manager handles a firm's compensation strategies from a broader perspective. Often his or her duties involve formulating executive pay. He or she may oversee the full array of a company's compensation practices.

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