The Primary Key Points which Create International Payroll CompliancePosted by Bright Kumar on April 27th, 2021 According to the 2019 Global Payroll Complexity Index, data, particularly, the safe-guarding and security of information - is currently the primary issue for the industry. As the report states, “Payroll is the key to market success. It is the premium in payroll data which makes it incredibly high risk.” That payroll workers are, therefore, concerned about securing this valuable asset is not surprising. A questioning of payroll executives discovered the following: On average, Human Resource and payroll departments employ around 35 hours each payroll cycle on compliance-related iisues which range from watching regulatory proposals to originating and discussing new policies – enough work for a dedicated full-time employee. Group with less than five hundred workers average 23 hours per period on compliance duties, while those with 500-999 employees average thirty-one hours per period. That increases to 36 hours per cycle for organizations with 1,000-2,499 employees. What are the 3 main issues of concern? “The results of the Global Payroll Complexity Index confirm that in 2019, multinational organizations are challenged by managing increasing amounts of employee data, adhering to data privacy rules, and remaining compliant in a world of unique employment and taxation compliance rules 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 global payroll, the findings of the study may appear as no surprise. GDPR is a paradignm shift; the growing volume of information brings with it more security issues, as well as the constant onslaught of additional labor regulations aggregate to offer payroll professionals with a enormous task. Let’s look at each of these areas in a bit more detail and then see how payroll professionals are trying hard to resolve every concern. General Data Protection Regulation (GDPR) GDPR and how it is evolving Europe’s information protection laws may be arguably one of the primary important results on the payroll industry in recent memory. The regulation governs not just what information can be stored; but also, location, by whom, and for how long. What is also largely important for global operators is that GDPR applies not only to companies and organizations within Europe, but also to businesses and organizations outside of the EU if they provide goods or services to people in the EU or if they observe the behavior 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. Companies that fail to comply with GDPR risk reputational injury 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 nature of employee data reveals that organizations are in extreme pressure to ensure they do not become victim to hackers. Such a breach causes potential problems for employees, and it also places the company at risk of reputational damage and possible lawsuit. A recent example of such a violation happened in April when American education tech company Chegg experienced a data breach where hackers stole 700 records that contained both previous and present employee data like names and Social Security Numbers. Legislation compliance Staying up to date with changing legislation is a great challenge faced by payroll managers. Once again, this is not at all surprising given the high frequency of changes in the laws both local and global. From the 2019 Global Payroll Complexity Report, we know 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 regions are beginning to create more changes to their laws which will greatly impact the role of payroll. How can payroll better manage these issues? One response is to move to a unified global payroll provider. While the many abilities of a single payroll platform reach past obtaining compliance, the truth is they can significantly alleviate compliance concerns. GDPR The foundation of GDPR compliance is obtaining the protection of your data. Payroll should be able to address the following queries: What information do you own? How do you manage this information? Why are you holding onto this information? How safe is it? While analyzing different payroll vendors, take the time to explore all of these issues with them to ensure each has the abilities to meet your data obligations. The Immedis Platform protects your information by multiple tasks including encryption and the capability to isolate information from its subject so that the information is held individually providing another layer of security and protection. Information breaches Securing your information is important. But, a global payroll system that comes with an ISO level certification offers security. Especially, a ISO 27001 certificate as it is recognized as the global standard for information security management. Immedis are ISO certified, which means they perform regular internal audits and perform biannual outside audits to verify compliance. They additionally implement a strong control groundwork – each process on the Immedis Platform is user dated. Legislation updates Staying current with payroll regulations can be a behemoth obstacle. The issues and financial consequences of failure to do so are just as immense. Deloitte highlights the success of a global service vendor: “A global service provider creates a unique solution for the tax and social security compliance-related problems by providing payroll services for many countries across the planet.” An additional plus is getting updated information on amendments – particularly pertainining to local laws – as well as connecting with multiple vendors is managed by a single vendor. Immedis has thorough international payroll expertise and provides continuing updates on local legislative changes and any impacts on workers.Like it? Share it! More by this author |