Three Key Issues that Ensure International Payroll CompliancePosted by Shepard Damm on February 22nd, 2021 According to the 2019 Global Payroll Complexity Index, data, especially, the safe-guarding and security of information - is currently the main issue for the industry. As the report notes, “Payroll is the key to market success. It is the value in payroll information which makes it incredibly high risk.” That payroll managers are, therefore, concerned about safe-guarding this valuable resource is hardly surprising. A survey of payroll executives found that: On average, Human Resource and payroll departments spend around 35 hours per payroll cycle on compliance-related iisues ranging from watching regulatory proposals to creating and communicating new policies – enough time for a dedicated full-time worker. Group with less than five hundred workers average 23 hours each period on compliance issues, and those with 500-nine hundred ninetynine workers average thirty-one hours per week. It goes up to 36 hours per cycle for organizations with 1,000-2,499 workers. What are the 3 main issues of concern? “The findings of the Global Payroll Complexity Index find that in 2019, multinational companies are challenged by managing growing amounts of employee information, adhering to data privacy rules, and remaining compliant in a world of unique employment and taxation compliance laws across 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). For anyone employed in international payroll, the results of the date may come as no surprise. GDPR is a game-changer; the growing amount of information brings with it more security risks, and the non-stop changing of additional labor laws group to offer payroll professionals with a enormous job. Let us examine each of these areas in a bit more detail and then examine how payroll professionals are working hard to conquer every issue. General Data Protection Regulation (GDPR) GDPR and how it is evolving Europe’s information protection laws is arguably one of the primary important impacts in the payroll market in recent memory. The regulation governs not just what data may be held; but also, where, by whom, and for how long. What is additionally hugely important for global companies is that GDPR applies not only to companies and organizations within Europe, but also to companies and organizations outside of the EU if they offer goods or services to consumers in the EU or if they observe the actions of EU data subjects. All companies- regardless of where they are located- who process or store individual data of individuals residing in the EU are accountable and should be GDPR compliant. Companies 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 May 2018. Information issues The unique and delicate matter of employee information means that companies are in extreme pressure to ensure they don’t fall victim to hackers. Such a breach causes potential problems for employees, and it also puts the company at risk of reputational injury and legal action. A recent example of such an issue happened during April when American education technology business Chegg had a data issue where criminals stole 700 records containing both previous and present employee information such as names and Social Security Numbers. Legal compliance Keeping up to date with changing legislation is a great challenge faced by payroll professionals. Again, this is not surprising provided the high occurrence of changes in the laws both local and international. From the 2019 Global Payroll Complexity Report, we realize that since European countries still top the list for most complex reporting, the growing economies of South America, Asia, and Africa mean countries in these areas are starting to make additional changes to their regulations which will further impact the role of payroll. How can payroll better handle these issues? One response is to head to a unified international payroll service provider. While the many abilities 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 obtaining the protection of your data. Payroll must be able to answer the following queries: What information do you own? Where do you keep this information? Why are you keeping this information? How protected is it? When analyzing various payroll vendors, take the time to explore all of these issues with them to make certain each has the abilities to meet your information obligations. The Immedis Platform protects your information from several measures which includes encryption and the capability to isolate information from its subject so that the data is held separately providing an additional level of security and privacy. Data breaches Protecting your information is critical. But, a global payroll platform that provides an ISO quality certification provides security. Specifically, a ISO 27001 certificate as it is known as the international standard for information security management. Immedis is ISO certified, which means the company perform regular internal audits and complete biannual external audits to verify compliance. The company also implement a rigorous control scheme – each input on the Immedis Platform is user dated. Regulatory updates Staying updated on payroll legislation can be a over-whelming job. The risks and financial results of failure to do so are also immense. Deloitte shows the success of a global service provider: “A global service provider offers a unique solution on the tax and social security compliance-related issues by providing payroll services for most countries across the globe.” An additional plus is getting updated data on changes – particularly pertainining to local laws – as well as synchronizing with several vendors is taken care of with a single service provider. Immedis has thorough global payroll expertise and provides continuing updates on local legislative issues and their impacts on employees.Like it? Share it! More by this author |