The Main Key Points that Protect International Payroll CompliancePosted by Sexton Fallon on January 28th, 2021 Based on the 2019 Global Payroll Complexity Index, information, particularly, the protection and security of information - is currently the main concern for the industry. As the report notes, “Payroll is the key to business success. It is the value in payroll data that makes it very high risk.” That payroll workers are, therefore, concerned about protecting this valuable asset is not shocking. A polling of payroll professionals found that: On average, Human Resource and payroll departments use approximately thirty-four hours each payroll cycle on compliance-related iisues ranging from watching regulatory proposals to originating and discussing new policies – enough employment for a dedicated full-time worker. Companies with less than five hundred workers average 23 hours each week on compliance issues, while those with 500-999 employees average thirty-one hours per cycle. It increases to 36 hours per week for companies with 1,000-2,499 workers. What are the three main areas of worry? “The findings of the Global Payroll Complexity Index confirm that in 2019, multinational organizations are challenged by managing increasing volumes of employee information, adhering to data privacy rules, and staying compliant in a world of unique employment and taxation compliance regulations around the planet,” explained Mary Holland Global Director of Strategy, Development and Training at the Global Payroll Management Institute (GPMI) and the American Payroll Association (APA). To anyone working in global payroll, the findings of the date may come as no surprise. GDPR is a game-changer; the increasing amount of information presents with it more security issues, and the non-stop creation of new labor regulations group to offer payroll managers with a herculean task. Let us examine each of these issues in a bit more detail and then see how payroll professionals are trying hard to conquer each concern. General Data Protection Regulation (GDPR) GDPR and why it is evolving Europe’s data protection laws is arguably one of the most significant results on the payroll market in the recent past. The law governs not only what information may be held; but also, where, by whom, and duration. What is also hugely significant for global companies is that GDPR applies not merely for businesses and organizations within the EU, but also to businesses and organizations outside of the EU if they provide goods or services to people in the EU or if they monitor the actions of EU data subjects. All companies- regardless of where they are domiciled- who process or hold personal data of individuals residing in the EU are accountable and should be GDPR compliant. Companies that neglect to comply with GDPR face reputational damage and fines. Based on the recent report, data protection regulators have levied EUR114 million in penalties since May 2018. Information breaches The unique and delicate matter of employee information means that organizations are under significant pressure to make sure they don’t become victim to hackers. Such global payroll vendor causes potential problems for workers, and it additionally puts the company at risk of reputational damage and legal action. One of the recent examples of such a violation occurred in April when American education technology company Chegg had a data breach where criminals stole 700 records that contained both past and current employee data like names and Social Security Numbers. Legislation compliance Keeping up to date with changing legislation is a great challenge faced by payroll professionals. Again, this is hardly surprising provided the high occurrence of changes in the laws both local and global. From the 2019 Global Payroll Complexity Report, we realize that since EU countries still top the list for most involved reporting, the growth markets in South America, Asia, and Africa mean countries in these areas are beginning to make additional changes to their regulations which will further impact the role of payroll. How can payroll best manage these issues? A response is to move to a unified global payroll service provider. While the many capabilities of a single payroll platform reach past ensuring compliance, the fact is they can significantly mitigate compliance concerns. GDPR The foundation of GDPR compliance is obtaining the protection of your data. Payroll should be able to address the following questions: What data do you have? How do you manage this data? Why are you holding onto this data? How safe is it? While reviewing various payroll vendors, use the time to discuss each of these questions with them to make certain each has the capabilities to satisfy your data obligations. The Immedis Platform protects your information through multiple measures which includes encryption and the ability to separate data from its subject so that the information is held separately adding an additional layer of security and protection. Information breaches Securing your information is critical. However, a global payroll platform that provides an ISO level certification offers security. Especially, the ISO 27001 certificate as it is acknowledged as the international standard for information security management. Immedis are ISO certified, which means they perform frequent internal audits and complete biannual outside audits to verify compliance. They also implement a rigorous control plan – every update on the Immedis Platform is user timed. Legislation updates Remaining current with payroll legislation is a over-whelming task. The risks and monetary consequences of failure to do so are equally enormous. Deloitte highlights the advantages of a global service provider: “An international service vendor creates a compelling solution on the tax and social security compliance-related issues by offering payroll services for many countries across the planet.” An additional plus is receiving updated data on changes – particularly pertainining to local laws – and synchronizing with several vendors is managed by a single vendor. Immedis has thorough global payroll expertise and provides continuing feedback on local legislative issues and the impacts for employees.Like it? Share it! More by this author |