“Transparency and compliance with the law are factors of further development” – Christian Wolff
Several organizations are seen venturing into newer geographies with an intent of finding newer markets. This expansion has given rise to organizations having to re-look at their existing global payroll process. One of the most important factor organizations need to bear in mind is to ensure that they remain compliant to in-country policies and regulations” across all countries of operations.
As more and more companies go global, several rules and regulations multiply with each new country of operations and ensuring compliance becomes harder and harder. Being ignorant to changes in local laws with inconsistent and inadequate documentation of compliance policies & procedures are often considered as pitfalls in Global Payroll Compliance.
To simplify the administration of Global Payroll Compliance, companies should consider the following four best practices
1) Storage and review of data:
Policies and procedures should be reviewed and updated on a regular basis. Sometimes it’s best to cast the net more broadly in a review within an organization to make sure that all compliance areas are covered.
In an organisation there are different types of data/ information stored and for staying compliant, it is necessary that certain specific type of information that are pertinent to compliance are stored for a defined period of time, such as four years for all The Federal Insurance Contributions Act (FICA) and The Federal Unemployment Tax Act (FUTA) information. There are other reports which must be filed at a pre-specified time of the year with their respective government agencies to prove compliance. An employer can leverage an HRIS to notify managers when these reports are due, this will help them to ensure that reports will be sent out on time with all the required information.
2) Proactive coordination with local officials and internal departments:
Payroll non-compliance issues can be indicators to local governments, that an organization may be non- compliant in other areas of the business and this may further lead to deeper unwanted scrutiny. Proactive working with local officials under audit can help preserving the organization’s corporate reputation, lead to greater leniency with the authorities and may also reduce potential penalties that can be assessed. It is a good practice to increase the scope of compliance policy meetings to include more players in an organization that includes members of HR, finance, tax, compensation/benefits and legal teams.
3) Usage of Smart and Simple Global Payroll Compliance System:
Implementation of any business software can become time-consuming and complex and setting up a global payroll system is no exception! A holistic global payroll solution created with the aim to address global payroll complexities should equip the user with tools that not only support with the core-payroll process, but also ties to auxiliary services like helping the organization stay compliant to local laws.
A well-mapped onboarding process for the solution is essential for organizations to handle change effectively and derive maximum benefits as per commitments made prior to implementation. It is essential to have a roll-out plan and a smart implementation timeline plotted out. Compliance can be achieved in a transparent manner, through a well-standardized approach providing effective real-time tracking.
4) Leverage local, in-country expertise:
To manage regional payroll requirements it is important to have local knowledge and expertise to comply with payroll requirements in foreign jurisdictions. But securing in-country expertise requires much more than just online research.
The key to equipping the payroll system with local knowledge is to work with a payroll partner that has thoroughly vetted in-country vendors in the countries of operation.
Leading providers offer access to standardized payroll processes as well as a network of proven in-country suppliers— enabling the company to enjoy the security of a robust payroll system, wherever their businesses take them.
In-house HR executives can make more informed decisions about the processes and systems they need to leverage for global business opportunities, by understanding the legal, accounting and administrative threats associated with Global Payroll. The key to Global Payroll compliance would be to choose a global payroll provider who can exhibit thorough knowledge and experience of having handled in-country payroll and compliance for all countries of operations.
Neeyamo follows an innovatively structured triangulated compliance framework supported by its in-house knowledge organization and vast global presence to monitor and manage global payroll compliance effectively. A dedicated team of compliance experts proactively track regulatory changes and maintain an inventory of laws and statutory regulations that have helped its customers stay compliant irrespective of its country of operations.
Neeyamo’s global payroll platform, PayNComp, is designed to give its customers a futuristic edge to manage their global payroll operations through constant innovation that touches the lives of not just its customer’s payroll team but also focuses on enhancing an employee’s payroll experience at large. Click here to request a free demo of PayNComp.