Ensuring organisations remain compliant in the face of complex and constantly changing requirements is one of the biggest challenges facing those managing global payroll operations. Requirements such as the need to keep paper records, rules around hiring and firing, and the administration of a large number of mandatory and customary benefits all contribute to creating a high administrative workload.
Not only must payroll managers navigate their way through the layers of complexity to get to grips with how labour laws, tax rules and other statutory legislation apply to their operations, they also need to differentiate between a statutory requirement and a commonly accepted practice and its potential impact on employee relations.
One of the greatest challenges global payroll teams face is understanding the changing legislative requirements. It’s not just that the requirements are complex and prescriptive, but many countries are also undergoing significant revisions to their labour laws, requiring subject matter experts to keep on top of changes.
In some countries, changes can be introduced at short notice to take place with immediate effect. There can also be uncertainty about interpretation.
Many companies have managed to address payroll compliance successfully by:
working closely with other internal functions such as tax and treasury, legal, and compensation and benefits
relying on system vendors and outsourcers
bringing in targeted expertise on the ground
relying on updates from third-party software providers.
Payroll is a substantial part of business expenses, but many organisations remain focused on the bigger picture. Regular assessments of payroll structure, employment policies and overall employee cost profile can be hugely beneficial, but are often overlooked. Such payroll health checks are a valuable tool for identifying areas where a company is overspending or where financial penalties may be incurred, as well as mitigating fraud risk or potential non-compliance.