3 Key Issues that Ensure Universal Payroll Compliance
From the 2019 Global Payroll Complexity Index, information, especially, the protection and security of data - is now the top issue for the market. As the report states, “Payroll holds the key to market success. It is the value in payroll data which makes it incredibly high risk.” That payroll executives are, therefore, worried about securing this valuable asset is not surprising. A questioning of payroll professionals found that:
On average, HR and payroll departments spend around 35 hours per week on compliance-related activities which range from mapping regulatory proposals to creating and communicating new policies – enough employment for a dedicated full-time worker.
Organizations with fewer than 500 employees average 23 hours each period on compliance duties, while those with 500-999 workers average 31 hours per period. It increases to 36 hours per cycle for organizations with 1,000-2,499 employees.
What are the 3 primary issues of worry?
“The findings of the Global Payroll Complexity Index find that in 2019, global companies are challenged by managing growing amounts of employee information, adhering to data privacy regulations, 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 results of the date may appear as no surprise. GDPR is a paradignm shift; the growing volume of data presents with it more security risks, as well as the non-stop onslaught of new labor laws aggregate to present payroll professionals with a giant job.
Today we will examine each of these issues in a bit more detail and then see how payroll professionals are trying intensely to conquer each 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 on the payroll market in recent history. The law governs not just what data may be stored; but also, where, by whom, and for how long. What is additionally largely important for global companies 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 offer goods or services to people in the EU or if they observe the actions of EU data subjects. All companies- regardless of where they are located- who process or hold personal data of individuals residing in the EU are accountable and should be GDPR compliant.
Companies that fail to comply with GDPR risk reputational damage and fines. According to the recent report, data protection regulators have levied EUR114 million in fines since May 2018.
The unique and delicate nature of employee information reveals that organizations are in significant pressure to make sure they don’t fall victim to hackers. That type of issues causes possible problems for employees, and it also places the organization at risk of reputational damage and legal action.
A recent example of such a violation happened in April when American education technology company Chegg had a data issue where hackers stole 700 records containing both previous and present employee data like names and Social Security Numbers.
Keeping current with changing legislation is a great challenge faced by payroll professionals. Once again, this is hardly surprising given the high occurrence of changes in the laws both local and international. From the 2019 Global Payroll Complexity Report, we know that while EU countries still top the list for most complex reporting, the growth markets of South America, Asia, and Africa mean countries in those areas are beginning to make additional changes to their laws that will further affect the role of payroll.
How can payroll better manage these challenges?
A response is to head to a unified global payroll provider. While the many capabilities of a single payroll system extend past ensuring compliance, the truth is they can significantly minimize compliance concerns.
The foundation of GDPR compliance is securing the protection of your information. Payroll must be able to answer the following questions:
Which information do you own?
How do you manage this information?
Why are you keeping this information?
How safe is it?
While reviewing different payroll service providers, take the time to explore all of these questions with them to make sure each has the capabilities to satisfy your data obligations. The Immedis Platform safe-guards your data by several tasks which includes encryption and the ability to separate information from its subject so that the information is kept individually providing another layer of security and privacy.
Protecting your information is important. However, a global payroll system that comes with an ISO quality certification provides security. Specifically, an ISO 27001 certificate as it is recognized as the international standard for information security management. Immedis are ISO certified, which means Immedis run regular internal audits and perform biannual external audits to ensure compliance. They additionally employ a rigorous control scheme – each action on the Immedis Platform is user timed.
Remaining current with payroll legislation is a enormous task. The issues and financial results of failing to do so are equally enormous. Deloitte presents the advantages of a global service vendor: “A global service vendor offers a unique solution on the tax and social security compliance-related problems by offering payroll services for many countries around the globe.” An additional plus is getting updated information on changes – especially about local regulations – and synchronizing with multiple vendors is managed with a single service provider. Immedis has thorough global payroll expertise and offers continuing updates on local regulatory changes and their impacts on the workforce.