04:05 Issue 3

04:05 GLOBAL PAYROLL

Selecting

ISSUE 3 I 2024

A HOLIDAY FOR PAYROLL? The technicalities of a summer break

CANADIAN FIASCO ConseneLes nobis es eaque pra ne que dictatumquae aut lam et faciis maiores.

A VITAL ALLY WITH A RISK Embracing technology in payroll enhances efficiency and accuracy

WHEN IS PAYDAY IN THE USA? Exploring the Options

UK ELECTION & THE KING’S SPEECH The people had voted for change

The first and leading

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GLOBAL PAYROLL MAGAZINE

Foreword

August is a strange time for the global payroll community. As people fly away to enjoy holiday leave we can find ourselves left behind, ensuring that employees have wages to spend during their time away while searching for the space to take a break ourselves. This month in 04:05 we look at ways payroll professionals can tackle the challenges of the great vacation juggling act without dropping any balls! We also have your holiday reading sewn up with articles exploring paying global contractors, navigating talent challenges in Australia , what the King’s speech revealed about the new government’s approach to UK employment law and a deeper dive into Labour’s proposals and promises . A former GPA award winner is back in the spotlight as Daniel Bishop, our Payroll Student of the Year 2023, explains how his gaming skills became an unexpected asset as he began his career.

And, a fortnight after payroll emerged unscathed from the Microsoft/CrowdStrike global IT outage, Zennie Sjölund reminds us about the importance of payroll contingency plans . Something we know all too well is that - whether it be a transformation failure, a cybersecurity breach or software-related - the payroll process can be disrupted by forces outside our control . Do you have an alternate way to access essential data when the tech we rely on goes awry? Several media outlets approached me for comment on the IT outage and, after the same questions came up repeatedly, I was reminded that people on the ‘outside’ can find it hard to understand what payroll is and what payroll professionals do. Every month in 04:05 , we are proud to share the words and knowledge of global payroll experts and showcase the wide range of talent our industry contains.

CEO Global Payroll Association Melanie Pizzey

Contacts The Global Payroll Association , 49 Greek St, Soho, London W1D 4EG. Tel: +44 (0)203 871 8870 Melanie Pizzey - CEO and 04:05 Executive Editor: melanie@globalpayrollassociation.com Rich Robins - 04:05 Designer: hello@megandmore.co.uk Hayleigh Blinkhorne - events/vendors/advertising: hayleigh@globalpayrollassociation.com General enquiries/mentor scheme/training : info@globalpayrollassociation.com Michael Baer - US contributor: mike@globalpayrollassociation.com Nilufer Gul - GM APAC/Australia: nilufer@globalpayrollassociation.com Tel: +61 (0)413 749 714

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08 A holiday for payroll?

The technicalities of a summer break

14 A vital ally with a risk Embracing technology in payroll enhances efficiency and accuracy 18 When is payday in the USA? Exploring the Options 22 UK Election & the King’s speech The people had voted for change 28 Securing payroll excellence Navigating talent challenges in Australia’s evolving landscape How the CrowdStrike incident impacted global payroll operations 38 Work-from-home in the Philippines Navigating Legal Compliance 44 The great payroll makeover How AI is Redefining the Game 50 Labour’s employment proposals A closer look at the Labour Party’s New Deal for Working People 58 Payroll profile 32 CrowdStrike Daniel Bishop is the subject of the very first 04:05 Payroll Profile 62 The Power of analytics Payroll management has evolved significantly with the integration of analytics

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CONTENTS

68 On-demand pay in the USA Flexible pay programs would change under a new proposal 72 From local to global Smart steps to global contractor payments 76 Asia Briefing Overview on Asia news ALSO IN THIS ISSUE 06 NEWS Interactive global payroll news 37 Agony Aunt On-call policies and procedures 48 Diary of an HR Manager 56 GPA Training Join our experts as they take you through the process of running payrolls in different countries

78 GPA Webinars

The latest global and in-country payroll topics and trends

80 Find a vendor

A comprehensive list of suppliers to the global payroll industry

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USA

Scam of COVID-19 Payroll Tax Credit Overwhelms IRS Processing

Workplace waterworks: a third of employees have cried at work in the past year

GLOBAL

Pay settlements stay at 4.9% in three months to June

Second Microsoft outage a fortnight after global IT chaos

HONG KONG

USA

Government to expand scope of Sexual Conviction Record Check Scheme

Historic $35.8M recovery judgement after Pennsylvania healthcare wage theft

SOUTH AFRICA

SAUDI ARABIA

Companies Act amendments pose significant risk to lower- paid employees

New initiative permits employment of expat dependents in health and education

USA

Disneyland Resort narrowly avoids first strike in decades

7.6m taxpayers should look out for HMRC refund letters

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UAE

SPAIN

Launch of first inclusive digital wallet for underbanked

Payflow raises €6 million to expand flexible salary in Iberian and Latam markets

GLOBAL

SWITZERLAND

IT outage hits payroll systems risking late wages for millions

Workers less likely to seek pay rises than German and French counterparts

Click on the interactive map to view other world news

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A Holiday for Payroll?

By Jo Marshall

GLOBAL PAYROLL MAGAZINE

It’s the time of year we all love; sunshine, long warm summer days and going on holiday. Or maybe just having time away from work. Whatever your plans are, what better benefit can an employer provide than having the day off and getting paid for it?!

But it is a challenging time for the payroll community, whether you are managing a team of payroll professionals or maybe you’re the only one in the business who can process the payroll. It’s a balancing act, juggling holiday leave and processing payroll, because everyone still needs to be paid. But after all, we only need to press a button…

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If you are lucky enough to have a team around you, in theory, taking a holiday should be easy enough, surely, we just cover each other’s work? But what about sickness, and other absences, they continue even though holiday requests have been approved. Therefore, do we ask our colleagues to only book holidays outside of busy processing time, maybe just the first couple of weeks of each month, or only allow a maximum of one week’s holiday at a time? Maybe you set these limits yourself. If you are the only person who knows how to process the payroll, do you find you are working around the processing dates? How do we manage this with our families? Children and school holidays, partners and their commitment to their employer/business. These are interesting questions when we consider why we are all entitled to statutory holiday. Health and Safety. Time off to relax, re-coup, re-charge our batteries. We should return to work to a normal level of workload, not a backlog that no one has touched in two weeks. But how many of us can say that happens? 2024 has been an interesting year for statutory holiday. Following the consultations in 2023, we now have 2 new options available to us when managing holiday leave and pay for irregular-hours workers and part-year workers.

Accrual Using 12.07% of the hours worked each pay period, bank the accrued hours so the worker can book and take leave during the holiday year Payment is still based on the last 52 /104 weeks of payments made Managing holiday booking and encouraging workers to take leave – use it or lose it! Rolled up holiday Pay as you go, paying an additional 12.07% of earnings Worker earns more money, but will not be paid when they take leave Don’t forget! When an irregular hours worker/part-year worker can’t take their statutory holiday due to sickness or parental leave they can carry this forward.

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The government did suggest merging the two separate leave entitlements into one pot of statutory annual leave, but the response was to keep the two separate. Remember, anything in addition to statutory holiday is contractual leave and should be detailed in the employment contract/ company policy. This also means we have two different payments to make for holiday. Or even three if your contractual terms state it! Basic pay and normal pay Basic Pay - the 1.6 weeks statutory leave and UK public holidays. Depending on what the contract states (company policy), if you can have the day off on a public holiday, Christmas Day, Boxing Day, New Year’s Day etc., you receive your salary. Basic pay. Normal Pay – the 4 weeks, these are the days we generally request to take off. We should be paid what we normally receive. If you are only ever paid a salary, that is what you receive. But if you are paid commission, over time things get more complicated… From 1st January 2024, the components which must be included in normal pay are: Payments, including commission payments, intrinsically linked to the performance of tasks which a worker is contractually obliged to carry out Payments relating to professional or personal status and relating to length of service, seniority or professional qualifications

Based over a set 52 weeks, including weeks not worked Calculate the average number of hours per week worked during the 52-week relevant period before the worker started the maternity or family-related leave or sickness Do not include weeks where the worker is on maternity, family-related leave or off sick for any amount of time Weeks not worked for any other reason should be included All workers are legally entitled to 5.6 weeks of statutory holiday leave per year Regulation 13 – 4 weeks (EU) Additional leave – 1.6 weeks (UK) The new percentage method is based on this; 5.6 ÷ 46.4 x 100 = 12.07%

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Other payments, such as overtime payments, which have been regularly paid to a worker in the 52 weeks preceding the calculation date The following extract has been taken from Department for Business & Trade guidance: Holiday pay and entitlement reforms from 1 January 2024 It doesn’t really give us a definitive list of earnings that should be included in the normal pay calculation but I guess a definitive list would be difficult to produce as we all use slightly different terminology for the payments we process. Therefore, the task passes back to payroll; trying to identify the payments which are, in essence, commission, performance-related, overtime etc. If you can identify these elements, communicate! Discuss the findings with HR and Finance, the additional

costs will need to be budgeted for. Decide and agree upon a process moving forward that can incorporate a calculation that includes these elements. Consider the payroll software/provider, can they help? Remember to include the workers too, their agreement is equally as important as that of HR and Finance. Why are we doing this? Because the guidance still states: It is not intended to be relied upon in any specific context or as a substitute for seeking advice, legal or otherwise, on a specific circumstance, as each case may be different. If employers introduce changes to terms and conditions, they must seek to reach an agreement with their workers or their representatives Other useful contacts Holiday entitlement calculator - ACAS Helpline - 0300 123 11 00

Author: Jo Marshall

Jo has over 20 years of payroll experience, working in a variety of different roles. Jo has always been involved in payroll, this includes the 10 years whilst working for an HR and Payroll software provider. During those 10 years, roles included consultant, project manager, payroll quality manager and finally, going on to establish and implement a payroll-managed service using the company’s standard HR and Payroll product.

Going freelance in 2016, opened further opportunities, working with the CIPP, as a trainer, consultant and working on the advisory desk. Now a regular presenter for UK Training, MBL Seminars and GPA, covering topics such as essential payroll, P11d, benefits and expenses, payrolling of benefits, automatic enrolment and pensions, holiday pay and leave entitlement and off-payroll working.

Transform your global payroll experience with the award winning UKG One View™.

A VITAL AL WITH 04:05 ISSUE 3

Technology is one of payroll’s best friends, enhancing efficiency and accuracy in payroll processing. The advancements in software development and support systems have transformed the way payroll is managed, making it more streamlined and reliable. However, recent incidents

involving malware updates remind us of the importance of having a plan B when it comes to our technological buddies. The historical outage in mid-July caused by a software update, despite its good intentions, should serve as a

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LLY H A

Embracing technology in payroll significantly enhances efficiency and accuracy. However, it’s crucial to remain vigilant and prepared for potential disruptions. Contingency planning and maintaining payroll knowledge are essential to navigating the complexities of automation and ensuring uninterrupted, compliant payroll processing.

By Zennie Sjölund

wake-up call. Next time it might not be the good guys working hard to make things right. Sweden, like many other countries, was affected, though not as severely as others. Nevertheless, we have had our own experiences, and many Swedish payroll departments have become

more aware due to the cyberattacks made public in recent years. This awareness has driven improvements in security measures and contingency planning, ensuring that payroll processes remain robust and resilient.

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“Payroll has a fundamental mantra: employees must get paid, no matter what. Various forms of technology help us achieve this with quality assurance.”

The Mantra of Payroll: Uninterrupted Payments Payroll has a fundamental mantra: employees must get paid, no matter what. Various forms of technology help us achieve this with quality assurance. The progress in software development and the support it provides are rapidly advancing. Automation, artificial intelligence, and digital tools are increasingly integrated into payroll systems, improving accuracy and reducing manual errors. As in other areas of expertise, the impact of AI is also flourishing within payroll. AI-powered tools can handle complex calculations, compliance checks, and data analysis more efficiently than ever before. Going back in time and thus in technology is not desirable, so what should be done? In Sweden, the reporting to banks and the Tax Agency is almost completely done electronically. This digital integration ensures that data is transmitted quickly and securely, reducing the risk of errors and delays. While technology greatly enhances payroll operations, it’s essential to remain vigilant and prepared for potential disruptions. For every payroll run, there should be a contingency plan. And not only in theory; it needs to

be tested. Practice makes perfect. One of the more well-known outages in a Swedish payroll was resolved due to the contingency plan being tested the month (!) before the breach. Regular testing of contingency plans helps identify weaknesses and ensures that the team is ready to respond effectively to any crisis. Liability and Knowledge in an Automated World Another important issue when it comes to using technology is the matter of liability. Automation and digitalization, AI, and APIs help us save time, but they should not reduce payroll knowledge. To ensure correct payroll processing, knowledge is crucial for analyzing, making requirements, and working proactively with payroll data. Understanding the intricacies of payroll laws, regulations, and agreements is essential for accurate processing. In Sweden, we have 642 collective agreements in addition to legislation and specific individual settlements. This complexity means that a standard solution is seldom the answer. Payroll professionals must be well-versed in local laws and agreements to ensure compliance. Adding a global perspective, we all know that local

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“In Sweden, we have 642 collective agreements in addition

knowledge is vital. Each country has its own unique set of regulations and requirements, and global payroll operations must account for these differences. Letting the system support you with the interpretation of regulations is rather common, and the trend now is to let AI do even more. AI can assist in interpreting complex regulations and ensuring compliance, but human oversight is still necessary to handle exceptions and unique cases.

to legislation and specific individual settlements. This

complexity means that a standard solution is seldom the answer.”

Rule as Code: The Future of Regulation

In Sweden - following the examples of Estonia and New Zealand - Rule as Code is trending. Rule as Code is the concept of writing digital government rules, legislation, regulation, standards, and policy in a language machines can understand – code. This approach allows for more accurate and efficient implementation of regulations within automated systems. As more and more gets automated, where will the liability lie if things go wrong? The increasing reliance on automation and AI raises important questions about responsibility and accountability. When systems fail or errors occur, determining who is liable can be complex. It is essential to establish clear guidelines and protocols for handling such situations, ensuring that accountability is maintained. Embracing Rule as Code can streamline regulatory compliance and improve accuracy, but it must be accompanied by robust governance frameworks to manage risks effectively.

Secure and Reliable Payroll Operations

With robust contingency plans and maintained payroll expertise, organizations can ensure secure, reliable, and compliant payroll operations, maximizing the benefits of automation and AI.

Author: Zennie Sjölund

Zennie Sjölund is a well-known and highly

respected figure in Global Payroll.

She is the Sweden-based Divisional Director Payroll of Srf konsulterna - the association of Swedish Accounting and Payroll - and has 20 years of payroll industry experience with a special focus on payroll intelligence and trendspotting.

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ISSUE 3 When is Payday in Exploring the Opti Of the many tasks that Payrollers struggle to com a timely manner in the United States, meeting the requirement can be one of the most complicated

Author: Christine Stolpe

Within each state in the U.S., there is at least one labor agency that defines and polices the wage and hour rules for paying anyone living or working within the state. This is because the U.S. Constitution provides “states’ rights” to determine requirements for many payroll-related requirements. In addition, certain industries have payroll frequency requirements written into state laws.

Monthly payroll is still the most common pay frequency for all

countries but two and, in one of those two, the U.S., employers generally can consider multiple pay frequencies: daily, weekly, bi-weekly, semi-monthly, monthly, quarterly, semi-annually, or annually. However, it is not as flexible as it seems as some frequencies are mandated, and generally, once a pay cycle is set, it should not be changed frequently. The U.S. federal labor law contains no provisions strictly dictating when employees need to be paid, only that they are paid fairly, accurately, and timely. However, the frequency selections become fewer when considering the individual governments of each state and/or territory.

Let’s dig in a bit more on the specifics of payroll timing across America.

“Some industries have hi followed the weekly pay regular practice. These in construction and tempor More recently, employers weekly payroll as a recrui financial benefit to lure m

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n the USA? ions mplete in e payday d.

istorically frequency as a ndustries include rary office workers. s are turning to iting tool, offering a more talent.”

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Weekly Pay A few states require weekly pay for certain types of workers. For example, in New York, weekly pay is required for manual workers, or those who spend 25% or more of their work time engaged in physical labor. Bi-weekly Pay This, by and large, is the most popular pay frequency. Pay cycles run for 14- day (two-week) increments, and pay is issued every other week on the same weekday. Every other Friday is a popular choice for employers and employees. The trickier part of a bi-weekly pay frequency is balancing any withholding for benefit plans that are billed or invoiced monthly. It can also make accruals a necessity for the Accounting and Finance Departments because the pay period end dates and actual pay dates rarely fall on the same day that the books close. Several more states say employers must pay at least bi-weekly: Massachusetts and New Hampshire are two examples. Semi-monthly Pay On two designated dates in each calendar month is the schedule of a semi-monthly pay frequency: the 15th and final day of each month. While it may not be the most popular chosen pay frequency, the majority of the states require at least some workers to be paid no less than semi-monthly. In California, most employees are to be paid regular wages no less than twice a month. The state also mandates the

specific pay dates to include in each pay cycle. Wages earned in the first 15 days must be paid by the 26th day of the same month, and wages earned in the second half of the month must be paid by the 10th day of the following month. Monthly Pay In the U.S., school teachers, government employees, and military personnel generally are paid on a monthly cadence. School districts have very specific collective bargaining agreements that dictate how the teachers in the area are paid, including frequency, and these agreements may override the state’s rules, such as in California. Nonprofit organizations under Internal Revenue Code Section 501(c)(3) also regularly pay monthly. In some states, highly-compensated workers and some employees exempted from that state’s payday requirements also are paid monthly. Early and Earned Wage Access (EWA) While not required, many financial institutions are providing employees with funds two days prior to the scheduled payday.

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“Another recent voluntary pay practice for employers is to provide earned wage access (EWA), or pay-on-demand . This new concept allows employees to draw amounts based on accrued pay within the pay cycle as frequently as they wish by creating a model of what the paycheck would look like if it were processed that day.”

Leavers/Terminations The rules for leavers vary by region and country as well as the context of the separation (happy vs. unhappy). The same is true for the U.S. in that each state can mandate the timing of final payments based on the context of the termination. My favorite example, California, provides that all leavers be paid on their final day of work unless they provide less than 72-hour notice prior to voluntarily quitting. Only if the employee quits without giving more than three days of notice does the California employer have that time to gather the necessary information to properly pay the leaver. Knowing where your employees live is, again, the most important piece of information you have in your records to ensure compliance in the U.S. and across the globe. Keeping track of all that is a big task.

Author: Christine Stolpe

Christine Stolpe, CPP, is a payroll aficionado with three decades of experience. As the founder and owner of Wages Creek, she untangles

complex Payroll puzzles and empowers others through her educational offerings. Christine also designs comprehensive training programs, mentors fellow Payroll professionals and curates an extensive online Payroll encyclopedia. Her story is one of connections, creativity, and a passion for making payroll less daunting and more delightful. For any specific questions about the above timing requirements in the United States, feel free to connect with her through the Wages Creek website .

Stay strong my fellow Payrollers!

The people of the UK voted in the 4th July 2024 General Election and, with the largest proportion of the votes based on a first-past-the-post election system, elected a large Labour majority of 411 of the 650 seats. The people had voted for change; a swing to the left where European elections have seen a significant swing to the right. UK Election & The King’s Speec 04:05 ISSUE 3

Author: P Simon Parsons MSc FCIPPdip MBCS

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A new government, a new King’s Speech The King’s Speech, written by the government and delivered by the Monarch at the State Opening of parliament, marks the beginning of a new session and is an opportunity to set the legislative agenda for the coming months. The speech sets out bills that it intends to introduce to the UK Parliament as well as announcing other policy priorities which may not require legislation. Before the Monarch arrives at the Palace of Westminster, the Yeoman of the Guard searches the cellars for explosives to commemorate Guy Fawkes’s gunpowder plot of 1605. The State Opening of Parliament begins with the King’s procession from Buckingham Palace to Westminster. He arrives at the Sovereign’s Entrance to Parliament and subsequently leads the Royal Procession to the chamber of the House of Lords. Following a custom which dates back to 1642, a senior officer in the House of Lords, known as Black Rod, will then march to summon members of the House of Commons into the Lord’s Chamber to listen to the King’s speech. Before entering the Commons chamber the door is shut in Black Rod’s face, the door is then struck three times before being opened.

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Fair Work Agency – Originally proposed as part of the Matthew Taylor report, but later dropped by the conservative government during COVID-19, there is to be established a new Single Enforcement Body to strengthen workplace rights. Currently, the National Minimum Wage is enforced by HM Revenue and Customs (HMRC) and other employment areas by other bodies such as those dealing with Gangmaster. The scope of the Fair Work Agency is likely to expand to other areas of coverage which may include holiday pay rights and enforcement of other employment rights. Previously employees often had to be in a job for 2 years or more but things are about to change.

This practice dates to the English Civil War and symbolises the elected Commons’ independence from the monarchy. When the Monarch leaves the chamber, a new parliamentary session begins. In the King’s Speech, which took place on Wednesday 17th July 2024, the new Labour Government put forward its mandate for change, to put economic growth at the heart of its legislative agenda. Whilst committing to make no changes to the general Income Tax and National Insurance position for some time, several measures were announced that impact employment, pay and pensions. Included among the long list of 40 government-proposed bills (more even than Tony Blair’s government) was the progression of a new bill to cover employment rights. Employment Rights Bill “My Government is committed to making work pay and will legislate to introduce a new deal for working people to ban exploitative practices and enhance employment rights” [Employment Rights Bill]. The Employment Rights Bill is claimed to be a significant step towards delivering the Government’s plan to ‘make work pay’ – the biggest upgrade to workers’ rights in a generation. These proposals relate to Great Britain.

“In the Kin 17th July 2024, mandate for cha

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Day 1 rights - To make parental leave, sick pay and protection from unfair dismissal a day 1 right, whilst ensuring that employers can still operate probationary periods for new hires. Flexible Working - Flexible working to become the default with employers required to accommodate as far as possible, reflecting modern workplaces. Zero hours contracts – To ban, what many see as exploitative, zero-hour contracts with workers having the right to a contract that reflects the number of hours regularly worked. To have reasonable notice of changes in shifts with proportionate compensation payments for any shifts cancelled or curtailed. This is to end one- sided flexibility and provide workers

with a baseline level of security and predictability. Statistics show that on average, a zero-hours worker works 25 hours per week. Fire and Rehire/Replace - Following the infamous P&O ferries case, to end the scourge of ‘Fire and Rehire’ and ‘Fire and Replace’ practices and to provide effective remedies. Protecting mothers – Expanding protections and making it unlawful to dismiss a woman who has had a baby for six months after their return to work. Statutory Sick Pay (SSP) - Strengthening SSP by removing the £123 per week Lower Earnings Limit (LEL) trigger point and removing the 3-day waiting period. 1.5 million

ng’s Speech, which took place on Wednesday , the new Labour Government put forward its ange, to put economic growth at the heart of its legislative agenda.”

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Genuine Living Wage Through changes to the remit of the Low Pay Commission, there is a commitment to remove any age differentials and ensure that the minimum wage is a genuine living wage. The current real living wage is £12 per hour. Will this affect salary sacrifice arrangements? Pension Schemes Bill This is to prevent people from losing track of pension pots and require pension schemes to offer retirement products “ so people have a pension and not just a savings pot when they stop work ”. It’s going to be busy So 2024 and 2025 are going to see significant changes in employment rights which will have an impact on business, HR management and payroll. Employers will need to consider their employment terms, benefit packages and how payroll is to be changed.

workers earn below the current weekly £123 qualifying amount - this exclusion and the 3-day waiting requirement have been viewed as disproportionately affecting those who are part-time and those in multiple low-paid jobs – the lowest paid. Trade Unions and negotiating bodies: Establishing a Fair Pay Agreement in the adult social care sector and looking at extending it to other sectors Reinstating the School Support Staff Negotiating Body and establishing national terms and conditions, career progression routes and fair pay rates. Removing unnecessary restriction on trade unions ensuring industrial relations are based on good-faith negotiations and bargaining Simplifying the process of statutory recognition to provide reasonable access to a union within the workplace.

Author: P Simon Parsons MSc FCIPPdip MBCS

Simon Parsons has been a major contributor to SD Worx’s payroll expertise since 1984. Besides being influential in the development of SD Worx’s payroll services, he is also a key presence on several HMRC consultative groups and committees. A fellow of the Chartered Institute of Payroll Professionals and one of the original Masters of Science in Payroll Management, Simon is a regular author and speaker on reward and payroll. He is Chair of IReeN, the electronic exchange with government user network, and Honorary Chair of the BCS (the

chartered institute of IT) Payroll Specialist Group. Simon is a regular GPA panellist and contributor. Payroll, HR and Legal Services | SD Worx

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Securing Payroll Excellence: Navigating Talent Challenges in Australia’s Evolving Landscape

Author: Melise Hasip

If you’ve been working in payroll, you’re undoubtedly aware of the considerable challenges in attracting and retaining skilled talent. Whether you’re a Payroll Manager overseeing the recruitment process or a team member witnessing the high turnover and influx of less qualified hires, it’s clear that securing top-notch professionals in Australia is becoming increasingly difficult.

High Turnover Rates: Payroll positions experience notably high turnover. Data from LinkedIn Insights reveals that the average tenure of a Payroll Specialist is just 1.3 years, a stark contrast to the 3-5 years typical in other professional roles. This elevated turnover rate can disrupt team dynamics, hinder productivity, and create a cycle of instability that affects the overall efficiency of payroll operations. Mismatch Between Salary and Skill Requirements: There is often a significant gap between the skills required for payroll roles and

the compensation offered. Many businesses do not fully appreciate the complexity and expertise needed to manage payroll effectively. As a result, they offer salaries that are insufficient to attract highly skilled professionals. This mismatch can lead to hiring individuals who are not fully equipped to handle the intricacies of the role, which in turn can result in errors, compliance issues, and a damaged reputation for the payroll department and individual. Limited Core Knowledge Among Candidates: Many individuals enter the

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payroll field by chance rather than through deliberate

Inflation of Salaries and Overstatement of Expertise:

career planning. While technology has streamlined many aspects of payroll processing, it can also obscure fundamental gaps in knowledge. For instance, some professionals may lack a solid understanding of manual payroll calculations and basic payroll processing principles because they’ve relied heavily on automated systems. As a result, these candidates may have a narrow grasp of the end-to-end payroll process, which can be problematic when deeper expertise is required.

The recent surge in payroll salaries has led some candidates to exaggerate their qualifications to secure higher compensation. This inflationary pressure reflects the high demand for skilled payroll professionals and highlights the disconnect between perceived and actual expertise. Candidates might request higher salaries based on inflated claims of their skills, which can create challenges in aligning salary expectations with the true capabilities of the workforce.

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Budget Constraints for Recruitment: Many payroll departments are constrained by limited budgets that prevent them from utilising specialised recruitment services. This often results in extended hiring processes and the potential for hiring less qualified individuals to fill critical roles. Consequently, the existing team may experience additional pressure working with under-skilled new hires, exacerbating burnout and job dissatisfaction.

become more complex, the need for knowledgeable and well-supported payroll professionals becomes even more crucial. Bridging the HR and Finance gap: Navigating the relationships between HR and Finance can be complex due to their distinct focuses—HR on employee data and benefits and Finance on financial transactions and compliance. Building strong partnerships with both departments is crucial for ensuring effective payroll operations. By fostering coordination, enhancing efficiency, and supporting accurate financial planning, these alliances contribute to smoother processes, reduced errors, and overall organisational stability. “The industry needs lea dedicated to investing i development of their pa this is often challenging on their time and resou

Insufficient Training and Development Opportunities:

Leaders in payroll departments are frequently overwhelmed with their responsibilities, juggling multiple roles due to staffing shortages. This leaves them with limited time to focus on the training and development of their teams. As a result, many Payroll Officers may not receive the promised support

and development opportunities, leading to frustration and high

turnover. The lack of adequate training also hampers the growth of employees, preventing them from reaching their full potential and contributing effectively to the department.

Increasing Compliance and Governance Requirements:

The importance of compliance and governance in payroll has escalated, with frequent legislative changes and stringent legal boundaries in place. Payroll is a critical function that underpins organisations’ financial health, yet it often does not receive the investment and attention it merits. As compliance requirements

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The industry needs leaders who are dedicated to investing in the training and development of their payroll teams, though this is often challenging given the constraints on their time and resources. In conclusion, most payroll departments would greatly benefit from additional resources to address these challenges. However, limited recruitment budgets and time constraints often complicate the situation. The understanding and support of senior leaders regarding the complexities of payroll play a critical role in overcoming these hurdles. To navigate this complex landscape, partnering with specialised payroll recruitment consultants can provide invaluable insights into the market, access to top-tier talent, and ongoing support.

aders who are in the training and ayroll teams, though g given the constraints urces.”

Over the past decade, I have observed a significant decline in the quality of payroll talent, driven by increasing demands and insufficient support staff.

Author: Melise Hasip Mel began her recruitment career nearly a decade ago, with a focus on payroll. Recognizing a gap in advocacy for payroll within many organizations, she committed herself to driving change in this crucial area. Mel has dedicated herself to partnering with some of Australia’s and the world’s leading companies to identify top payroll talent. She takes great pride in her strong relationships, extensive network, and unwavering passion for supporting payroll professionals.

If you want more information about payroll talent trends or want to discuss the market further, please do not hesitate to reach out. melhasip@future-you.com.au | +61 0481176294

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How the CrowdStrik Incident Impacted Global Payroll Operations Many Payroll professionals around the world either held their breath or began scrambling for alternatives as millions of computers failed to boot up on July 19 due to a glitch in a security software update.

Author: Michael Baer

The CrowdStrike software snafu meant for a time there was no access to many Payroll systems that used Microsoft Windows. Payroll may have successfully sent money to banks to ensure employees were paid on that day, but, in some instances, those deposits weren’t in employee accounts until later in the day.

Concern about not being able to continue processing pay reverberated across the worldwide Payroll community. Speaking to the UK’s Telegraph , the Global Payroll Association’s CEO, Melanie Pizzey, said she heard from “numerous clients already today who have been unable to access their

“Others logging on could not access their pay systems because their computers were displaying the ‘blue screen of death.”

GLOBAL PAYROLL MAGAZINE

were able to get into the systems another

payroll software.” The outage “could have very serious implications for businesses across the nation, particularly those who process payroll on a weekly basis.” Some U.S. Payroll professionals said that while their main third-party pay systems were not impacted, they could not access the programs because their company’s secure network was unavailable due to the outage. They

way, avoiding the internal network. Others logging on could not

access their pay systems because their computers were displaying the ‘blue screen of death. Fortunately, the reboot process suggested by CrowdStrike was available shortly after the outage occurred, and while most of those paid on Friday may have experienced delays, they generally were paid.

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Processes for future paydays could be affected. According to Pizzey, it is possible that “we could see a backlog with regard to processing payrolls for the coming month end which may delay employees from receiving their monthly wage.” “Payroll should never be caught flat-footed when there is an incident that impacts part or all of the process. Payroll operations can overcome serious outages like this with appropriate planning.” However, unlike those in air transportation and retail, Payroll, for the most part, was spared a direct, long- term hit from the system outage. But the incident serves as a wake-up call of sorts for contingency plans. Are You Prepared? Payroll should never be caught flat- footed when there is an incident that impacts part or all of the process. Payroll operations can overcome serious outages like this with appropriate planning.”Best practices for preparing for the worst include robust disaster recovery programs made in coordination with other units in the organization and with third-party services, business continuity protocols and data security incident response plans.

Knowing your organization’s disaster or incident response plan is key.

We all understand that building evacuation training can save lives by avoiding the panic that can ensue when there is a fire on the premises because people know what to do. Similarly, Payroll needs to know its role in any recovery and mitigation process, and disaster and incident response plans must be tested. The Global Payroll Association this year released “Cyber Response: A Toolkit for Payroll Professionals” to support an effective response to cyber incidents from critical to low severity. It has resources and checklists that the GPA made available so Payroll professionals can be prepared for the worst.

Author: Michael Baer

Michael Baer is president of Baer Unlimited, an independent

research, analysis, and communications provider that helps Payroll modernize operations, stay compliant, and improve the use and security of their data. For more on these issues discussed above, contact him directly at mike.baer@baerunlimited.com, or book Michael as a mentor through the GPA Mentor page.

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Jeni Morris

Jeni is a National Minimum Wage expert with unique insights and knowledge from her many years working within HMRC’s NMW team. She uses that wealth of experience to support businesses in mitigating the financial and reputational impact of ongoing or pending HMRC NMW investigations and to navigate the ever-changing regulatory requirements compliantly. Jeni is a regular speaker on NMW/NLW issues at regional and national conferences.

Without knowing details of which sector and the actual restrictions that you place on your on-call employees it is difficult to provide specific advice, however, do think about what the worker must do and where they have to be. For example, if the worker must stay where the employer says or do certain tasks while on call. It’s useful to look at how much the worker is limited or how much pressure they have when deciding on this. For instance, a worker who can stay at home or anywhere they like and just needs to be reachable might not be considered working when they’re not actively doing tasks for their job. But if a worker must be at, or near, a location while on call, they might be seen as working, even if they’re just relaxing or watching TV. Care should also be taken to ensure that the fixed on-call payment, together with the basic pay, is sufficient to cover all the additional working time undertaken in the pay period.

Question Due to a number of critical instances, I have been asked to review our business’s ‘on call’ payments - a proportion of our staff are required to be ‘on call’ at different times throughout the month. We obviously have on-call policies and procedures which include a fixed additional payment for the time they are called out to perform the urgent additional work but I do not want to fall into the realms of the ‘waiting to work’ National Minimum Wage risk. What would you advise?

You are quite correct to look at how the on-call requirement impacts the National Minimum Wage (NMW) calculation. Is it ‘on call’ time or, due to the restrictions placed on some on-call employees, will all the time be treated as ‘waiting to work’ time?

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Navigating Legal Compliance for Work-from-Home in the Philippines

Author: Anjali Choudhary

Worldwide businesses adapted to the remote work model in 2020 as a temporary solution without realising that this was going to change the working culture in the world.

Even though all the sectors had a rocky start, the remote work soon became a star tool in worldwide workplaces. A report by EY shows that 80% of companies said employees’ productivity was somewhat similar or much higher during the remote working period. To illustrate about Philippines specifically, a survey by Robert Walters on remote working in Philippines found out that 8 in 9 professionals in Philippines have increased job satisfaction when working remotely.

The boost of digital platforms has promoted freelancing and outsourcing in the Philippines.

According to a 2023 report by the IT and Business Process Association of the Philippines (IBPAP) , the revenue of Business Process Outsourcing (BPO) industry increased 10.3% to $32.5 billion, and staff count rose 8.4% to 1.57 million despite the global recession. They provide support services to companies including Amazon and Zoom.

GLOBAL PAYROLL MAGAZINE

Common Remote Work Challenges Faced by Employers and Employees The pros of a work from home model have been told and retold umpteen times. A research report of FlexOS shows that 53% of workers feel their work-life balance has improved due to remote work and 66% of hybrid and remote managers revealed that their team’s productivity has improved with a flexible working model.

The growth of the gig economy in Philippines can be noticed since 2019. In an article of the same year by Forbes , the Philippines ranked 6th among the fastest-growing markets for freelancers with a 35% growth from the previous year. The country’s support for remote work is vividly shown with their digital nomad visa , issued by the Filipino government also in May 2023. This visa allows remote workers from around the globe to stay in Philippines for initial 12 months, with the potential for another 12 months extension.

But, despite having numerous overarching benefits, remote work

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working remotely. Also ensuring that the employers don’t get unwanted notices for employees working remotely is another area of concern. Mental Wellness: As boundaries between work and life blur, employees might find it difficult to balance either. A statistics report by Zippia Research mentioned 86% of full-time remote employees, experience burnout. Besides, opportunities for social interactions with coworkers reduce significantly, leading to risk of isolation. The Telecommuting Act of 2019 As a favoured hub for outsourced professionals, the Philippines had already embraced the concept of remote work even before COVID-19. The Telecommuting Act of 2019 (‘the Act’), effective from 10 May 2019 was introduced to protect the rights of telecommuting workers and ensure that they receive the same treatment and employee benefits as their on site co-workers. Revised Telecommuting Rules On September 16th, 2022, the DOLE passed the Revised Implementing Rules and Regulations (IRR) of the Act. These revisions explicitly addressed the matters of the telecommuting sector and revolved around the following key points: 1. Telecommuting Parameters: The term ‘telecommuting’ is clarified with definitions for ‘Alternative workplace’, ‘Telecommunication’, and ‘Computer technology’. The

continued to pose several challenges. Some of them include:

1. Additional costs: Significant technology and financial

investments are required to ensure proper equipment supply, setting up emergency procedures and other operational workings. A study by Alliance Virtual Offices found that more than 75% of remote employees pay for their home office-related costs. 2. Regular training: Regular training may be required to ensure managers and HR teams can maintain employee productivity and engagement with advanced technology and tools. The remote workers also may need cybersecurity training in regular intervals to ensure the company data is not at risk to cyberattacks. The same study by Alliance Virtual Offices shows that since the beginning of the pandemic the rate of cyberattacks have risen by 238%. 3. Managing compliances: Tracking work hours accurately is one of the biggest concerns leading to non-compliances for employees “As a favoured hub for outsourced professionals, the Philippines had already embraced the concept of remote work even before COVID-19.”

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