Ensuring compliance has always been a headache … staying ahead of each country’s legislation becomes more complex with ever-changing rules and regulations. The risk of being fined for non-compliance weighs heavy on the heads of payroll professionals in addition to the challenge of paying you employees accurately and on time. And then add the pandemic on top of that with constant changes, keeping up with compliance becomes even more demanding.
In conversations with numerous companies, 70% of payroll professionals cite compliance as their biggest concern. Ensuring regulatory compliance in every country a company operates and staying ahead of constant legislation changes creates unavoidable complexity. As companies expand their global presence, they are turning to payroll providers to assist in being responsible for handling compliance.
Companies turn to iiPay when they encounter compliance violations, such as incorrect payment for a leave of absence or maternity leave, or processing RSUs without proper taxes. In fact, companies often commission iiPay to conduct compliance audits, which often results in catching other providers’ errors when they don’t use the appropriate calculations, tax rates, and similar issues.
Compliance issues abound when considering the vast number of country-specific legislation and variable tax laws. While this list could never be exhaustive, it captures some of the commonalities among international payroll departments:
The other common denominators across each of these examples are trying to meet deadlines and being able to stay on top of the huge volume of statutory requirements. To assist clients, iiPay built a knowledge portal for clients to search for changes by country that it constantly maintains. This provides real-time visibility into the constant changes in legislation that create time-sensitive hurdles for internal payroll teams.
As if there wasn’t already a constant pace of changes to keep up with, the COVID-19 pandemic presents more challenges with weekly and sometimes even daily updates. These country-specific updates include changes in how to handle getting tested for COVID-19, such as the amount of hours allowed for time off to get tested.
Another challenge lies in how each country defines “furlough.” For some, it’s working every other week, which complicates payroll processing. Some people’s jobs were reassigned, which impacts their salary or hourly rate based on job code. Some employees’ jobs got reassigned, which impacts whether they keep benefits or lose them or if they are considered full-time or part-time employees. Employers are sensitive to keeping up with the rapidly changing laws around medical leave and time off due to COVID-19.
A few examples of the ever-changing laws include some of these:
This sample of ongoing changes as the pandemic continues represents the tiniest glimpse into the overwhelming amount of updates to apply to stay in compliance.
Acknowledging the complicated and ongoing regulation changes due to the pandemic embodies the current situation. But when considering the additional complications for global companies to comply with local, state, and federal regulations, the waters get even muddier for payroll. Internal payroll teams often lack SMEs in each of these areas. It’s unreasonable and expensive to have a group of payroll employees to have this expansive knowledge.
As a means of keeping companies’ compliant, iiPay’s standard procedure is conducting random and spot audits, including auditing itself. This is a hallmark of the iiPay solution, guaranteeing 100% compliance in every country where it supports global payroll. With its technology and in-house country-level experts, iiPay detects inconsistencies, which prompts payroll discussions with payroll clients to correct information where there are errors.
iiPay clients can access the Global Payroll Information at any time and also benefit from iiPay’s connections with country governments to get legislative updates before they go into effect.
In closing on staying compliant, companies need to know the unique aspects of the countries where it does business, ensure that entry into that country is worth it and fits with the company’s mission, goals, finances, and culture. Consider taxes, labor costs, and regulations that vary, such as vacation, maternity leave, insurance, and benefits packages. Some countries have laws on housing or paying a mortgage as part of the compensation package. While it can be daunting, full compliance is possible with the right tools and expertise.
What sets us apart? Here are four key areas of focus that have enabled us to become the world’s leading cloud-based payroll services company.
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