PAYROLL INSIGHT
Risks and complexities affecting UK payroll
Caroline Garstang, of NGAHuman Resources, and co-author of the 2019 Global Payroll Complexity Index, presents key findings and the observations of industry leaders
Y ou’re likely reading this article because you have a vested interest in UK payroll. It might therefore surprise you to see the relatively low ranking of the UK at 34th in the 2019 Global Payroll Complexity Index (http://bit.ly/2qgV2Wo) (‘the Index’). We were initially surprised considering the intricacies we know go into each payroll run. A deeper dive into the feedback of nearly 2,500 payroll professionals highlighted UK payroll as established. Processes are mature and increasingly standardised. Technology is often in place to reduce admin and maximise accuracy. Laws are in place and changes well-communicated and usually run to a calendar. Across much of Europe this is not the case and explains why the top ten is dominated by countries including France, Italy and Spain where multiple external influences including powerful works councils and regional variances make managing payroll far more challenging. Further to this, 2019 saw for the first time the rapid rise of countries considered to be growing economies. Where once there were few rules and little employee protection in order to compete in the global market, countries across Eastern Europe, South America, Asia and Africa have had to implement major reforms, putting them ahead of the UK as major cultural changes come into play. Recently, I had the opportunity to sit down with Jason Davenport, CIPP chair, who shared his thoughts on the findings of the research. To paraphrase, Jason explained that
across Europe, and further afield, change can come much quicker and governments make tax changes with little warning. The full conversation with Jason Davenport, part of a webinar with Dan Wilson, who heads up the UK business as NGA HR, can be watched here: http://bit.ly/2OWYDTJ. The top five UK payroll complexities as we move into the 2020s are discussed below. ...heightened awareness of the liabilities around data handling... Data andGDPR-led changes What the General Data Protection Regulation (GDPR) has done is highlight the ‘vulnerability’ of data and the handling of it. The pressure is set to only get greater as we all become aware of our digital rights. Through the readiness process, organisations had to pull together companywide PII (personally identifiable information) handling and storage policies and processes. As a result, many respondents to the Index reported heightened awareness of the liabilities around data handling and this has added more stress. What controls and measures are in place? How are these being monitored and checked? Am I liable? If it were not arduous enough, countries have layered their own data protection rules
on top of GDPR and many more outside the European Union are adding their own GDPR-like legislation. The blog ‘GDPR is Going Global’ (http://bit.ly/31qQoBX), by Sascha Schneider of NGA HR’s legal team, goes into detail. Scenario planning and legislative changemanagement By the time this article is published we’ll know the outcome of the 31 October Brexit deadline. The payroll and human resources (HR) complexity impact is yet unknown. Jason Davenport provided a quick explanation: “If we leave with a deal we have until 2020 to look at what data and legislative changes there might be. If we leave without a deal, it’s off the table. There might be more regulations imposed as a result of this. “The Information Commissioner’s Office is working hard to get as much data together as possible for organisations to outline what might happen.” There are more immediate challenges, as highlighted by NGA HR’s Dan Wilson: “Multiple clients are asking the same question. In fact, I have this challenge in my own team; what happens with employees on short-term international assignments where on appointment to the role they had the right to live and work in the UK – do they still? What happens to the application process now? Does it change the employee’s status? Where does their contract sit – in the UK or elsewhere? Under which
| Professional in Payroll, Pensions and Reward | November 2019 | Issue 55 22
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