Three Key Issues which Create International Payroll CompliancePosted by Bock Herring on February 8th, 2021 As seen from the 2019 Global Payroll Complexity Index, information, especially, the safe-guarding and security of data - is currently the top concern for the industry. As the index states, “Payroll is the key to business success. It is the value in payroll data that makes it incredibly high risk.” That payroll professionals are, therefore, concerned about securing this valuable resource is hardly surprising. A polling of payroll professionals found the following: On average, HR and payroll departments spend approximately thirty-four hours per payroll cycle on compliance-related iisues which range from mapping regulatory proposals to creating and communicating new policies – enough work for a dedicated full-time employee. Organizations with fewer than five hundred employees average 23 hours per payroll cycle on compliance duties, while those with five hundred-999 employees average 31 hours per week. That increases to thirty-six hours per week for companies with 1,000-2,499 workers. What are the 3 primary areas of worry? “The results of the Global Payroll Complexity Index find that in 2019, multinational organizations continue to be challenged by managing increasing amounts of employee information, keeping to data privacy regulations, and remaining compliant in a world of robust employment and taxation compliance rules around the planet,” stated 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 international payroll, the results of the date may appear as no surprise. GDPR is a paradignm shift; the increasing amount of information presents with it more security risks, as well as the constant creation of additional labor rules aggregate to offer payroll managers with a enormous job. Let’s look at each of these issues in a little more detail and then see how payroll professionals are working intensely to tackle every concern. General Data Protection Regulation (GDPR) GDPR and how it’s evolving Europe’s information protection laws is arguably one of the top important impacts in the payroll industry in recent history. The regulation determines not just what data can be held; but also, where, by whom, and for how long. What is also hugely significant for global operators is that GDPR applies not merely for companies and organizations within the EU, but also to businesses and organizations outside of the EU if they provide goods or services to individuals in the EU or if they monitor the actions of EU data subjects. All companies- regardless of where they are located- who process or store personal data of individuals residing in the EU are accountable and must be GDPR compliant. Organizations that neglect to comply with GDPR risk reputational injury and fines. Based on the recent report, data protection regulators have levied EUR114 million in fines since 2018. Data issues The unique and sensitive nature of employee data means that organizations are under significant pressure to make certain they do not fall victim to criminals. Such a breach causes possible problems for employees, and it additionally puts the company at risk of reputational damage and possible lawsuit. A recent example of such an issue occurred in April when American education tech business Chegg experienced a data breach where criminals stole 700 records that contained both previous and present employee data such as names and Social Security Numbers. Legislation compliance Keeping current with changing legislation is a great challenge faced by payroll managers. Once again, this is hardly surprising given the high frequency of changes in the laws both local and global. From the 2019 Global Payroll Complexity Report, we know that while EU countries still top the list for most in-depth reporting, the growth markets in South America, Asia, and Africa mean countries in those areas are starting to make additional changes to their laws which will further impact the task of payroll. How can payroll better handle those issues? One response is to move to a unified global payroll provider. While the several capabilities of a single payroll system reach beyond obtaining compliance, the fact is they can significantly mitigate compliance concerns. GDPR The foundation of GDPR compliance is securing the protection of your data. Payroll should be able to answer the following queries: What information do you have? Where do you manage this information? Why are you holding onto this information? How protected is it? When analyzing different payroll vendors, take the time to discuss all of these questions with them to make certain each has the capabilities to meet your information obligations. The Immedis Platform protects your information from multiple measures including encryption and the ability to isolate information from its subject so that the information is held separately providing an additional layer of security and privacy. Information breaches Protecting your information is important. However, a global payroll platform that provides an ISO level certification offers security. Specifically, the ISO 27001 certificate since it is acknowledged as the global standard for information security management. Immedis are ISO certified, which means they perform regular internal audits and perform biannual external audits to verify conformance. The company also employ a strong control structure – every process on the Immedis Platform is user stamped. Regulatory updates Staying current on payroll legislation is a behemoth task. The issues and monetary results of failing to do so are just as enormous. Deloitte presents the success of a global service vendor: “A global service vendor creates a unique solution for the tax and social security compliance-related issues by providing payroll services for most countries across the planet.” An additional benefit is receiving updated information on changes – particularly regarding local regulations – and connecting with several vendors is taken care of with a single service provider. Immedis has comprehensive global payroll knowledge and offers continuing updates for local legislative issues and their impacts for workers.Like it? Share it! More by this author |