04:05 Issue 2

04:05 GLOBAL PAYROLL

Selecting

ISSUE 2 I 2024

CANADIAN FIASCO ConseneLes nobis es eaque pra ne que dictatumquae aut lam et faciis maiores. BREAKING BARRIERS Empowering Women in Payroll

LATEST FROM THE STATES What Trump’s tax proposals would mean for payroll operations

THE UAE’S WAGE PROTECTION SYSTEM Recent reforms and future trends

PAYROLL COMPLIANCE Streamlining the complexities of a global workforce

GLOBAL PAYROLL MAGAZINE

Foreword

The risks of managing payroll in Africa can seem daunting when considering expansion into the continent. Alex Daruty identifies the challenges and details the best ways to navigate them while Peter Forbes has tips for mastering payroll governance in Australia . Thenji Moyo and Dilini Loku bring us up to date with the UAE’s game- changing Wage Protection System and consider what the future will bring and Rick Hammell is here to streamline the complexities of a global workforce . The GPA team and I have been delighted by the reaction to 04:05 and we are committed to taking every issue to new heights. This is a magazine for and by our amazing global payroll community so do get in touch and add your voice to a future issue. Thank you all for your support!

This month 04:05 is celebrating excellence, from the story of a remarkable woman who charted her own course to become a payroll pioneer to coverage of the winners and highly commended nominees at the 2024 Global Payroll Awards. We are proud to introduce the second issue of the GPA’s brand new global payroll magazine and this month’s talented writers - a host of industry experts from around the world. Twenty-five years ago, Ayşe Nazmiye Uça established Turkey’s first payroll outsourcing company . Ayşe shares that unique journey here, in her own words. Victoria Thatcher opens our eyes to the untapped potential of neurodiverse people as a powerful force for good in payroll and the GPA’s US insider Michael Baer dares to imagine the ripple effect of Donald Trump’s tax proposals on payroll.

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 Breaking barriers

Empowering women in payroll

14 Latest from the States What Trump’s tax proposals

would mean for payroll operations

18 Payroll compliance Streamlining the complexities of a global workforce 22 Talent PEO Advertorial: Managing a multi-currency workforce in Africa 28 UK payroll Tax planning and avoidance measures becoming prevalent 32 The UAE’s wage protection system Recent reforms and future trends 37 Superpower for payroll Neurodiversity in the workplace 42 Mastering payroll governance 8 essential items 52 Payroll skills shortage Advertorial: Could this impact your global expansion plans 54 Economic and social issues in the US Exceeding the burden of overtime pay 58 Creating an entity in Africa The risks of setting up your own payroll

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18 CONTENTS 62 U.S. practitioner perspective Understanding when cash is a taxable benefit 66 UK employment law changes 2024 Key employment law changes and consultations 70 Online talent marketplaces Supporting the transformation of the workforce 78 Dezan Shira Advertorial: Overview on Asia news ALSO IN THIS ISSUE 06 NEWS Interactive global payroll news 46 The Global Payroll Awards The winners! 57 Agony Aunt Minimum Wage, maximum support 76 Diary of an HR Manager 80 Webinars The latest global and in-country payroll topics and trends 82 Find a vendor A comprehensive list of suppliers to the global payroll industry 37 14 58

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USA

INDIA

Gen Z unafraid of the prospect of a recession

Binance fined $2.25m by FIU over AML deficiencies

USA

MALAYSIA

Overtime Rule Survives First Court Actions, Mostly

Second worst country for work-life balance in new ranking

KUWAIT

USA

PAM provides shelter for expat workers and incentives for young nationals

$45K payroll cyberscam forces closure of upscale NYC restaurant

SPAIN

UGANDA

Oracle makes $1 billion AI and cloud computing investment

Broadcasting Corporation MD admits paying ghost workers

AUSTRALIA

CANADA

Millions warned not to ‘double dip’ on work- from-home claims

Tech gender pay gap nearly tripled since 2016

GLOBAL PAYROLL MAGAZINE

AUSTRALIA

Bid for public sector four-day workweek fails as pay falls short of demands

More than one million low-paid workers going without sick pay

EMEA

GREECE

Zellis announces the launch of Zellis HCM AIR

Required six-day 48-hour workweek begins

Click on the interactive map to view other world news

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GLOBAL PAYROLL MAGAZINE

Breaking Barriers and Empowering Women in Payroll

Author: Ayşe Nazmiye Uça

We all have our own unique story, a tale of survival and existence. For women in our country, this journey is a paradox—simultaneously accessible yet daunting. Our society, entrenched in a male-dominated and macho culture, operates by its own intricate codes. Transitioning from familial protection to marital confines, deciding to forge ahead independently becomes a painful ordeal. However, overcoming this struggle breaks through the glass ceiling, opening up boundless opportunities.

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It was through this relentless effort that I pioneered the payroll sector in Turkey. In the span of 25 years, amidst daily challenges of business development, cultivating company culture, facing setbacks, and getting back up again, I gradually realized that my journey had not only shaped a company but had also paved the way for an entire industry. “In 1999, during the dot-com boom, I left the CPA firm and started a payroll company. Starting a payroll company in Turkey back then was a bold move. No one was aware of such a service.”

The turning point came when foreign clients inquired about payroll services in Turkey, a concept I was unfamiliar with. My first payroll client was an international retail company for whom I had set up and managed accounting services. They soon requested payroll services, and this opportunity was very exciting for me. An unexpected call from a renowned payroll company, my client’s international payroll service provider, wanted to acquire our CPA firm. Although this wasn’t possible due to the partnership structure, it confirmed that I was on the right track with my desire to establish a payroll outsourcing company. In 1999, during the dot-com boom, I left the CPA firm and started a payroll company. Starting a payroll company in Turkey back then was a bold move. No one was aware of such a service. Every company I approached for payroll services came back with requests for employment services, and I often returned from client visits with a few outsourced employees on hand. While this helped grow my employment services business, payroll service remained my main goal, and I stayed focused on it. Initially, no one understood the need for such a service, but I persevered. By 2002, I envisioned an online payroll service, and by 2004, we had created BordroNET, our first web-based payroll system. Although the market was initially hesitant, we gradually built a customer base as Turkish companies began outsourcing operations to stay competitive. Even during the 2008

Breaking Barriers in Corporate Finance My background in corporate

finance, with its focus on borrowing and financial constraints, initially created barriers when it came to entrepreneurship. My first venture was with a CPA firm specializing in consultancy. However, I quickly realized consulting wasn’t for me; I wanted to be deeply involved in operations.

GLOBAL PAYROLL MAGAZINE

financial crisis, I kept investing in our software. This led to the development of the first cloud-based R&D payroll system in 2010, supported by government technology grants. Navigating Personal Challenges Balancing marriage and a career required extraordinary effort. For me, coming home from work often meant facing a second workload. Working overtime at the office usually led to an unhappy home life, eventually leading to the end of my marriage and having to raise my 2.5-year-old daughter as a single mother. Despite these challenges, I became stronger and more capable of making the best decisions for my daughter and me.

Years later, during a meeting with a European Job Agencies official, I spoke of my company and the services we provide. He automatically assumed I ran the business with my husband. When I clarified that I ran the company alone, he then assumed the company was established by my husband. I had to make a point that I had established my company in spite of my husband, and that I ran it on my own. I must say I will never forget his astonishment. This was a proud moment for me because it not only highlighted my success but also the strength and resilience women possess despite cultural expectations.

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Looking Back: Paving the Way for Others My journey has been a testament to resilience, pushing through societal and personal obstacles to pioneer an entire industry and leave a lasting impact. Reflecting on the path I’ve travelled, it was undeniably tough yet immensely rewarding. Not just for myself but for the entire payroll sector in Turkey. In Turkey, women’s achievements are respected, perhaps even more so than in Europe, as long as they’re not seen primarily as someone’s wife. Turkish men are deeply protective of their families, which adds layers to the challenges women face. However, in 2020, a significant milestone marked a turning point: my very first payroll client, a prominent Spanish retailer, returned. This reaffirmed that stepping away from traditional roles to build something new not only fulfilled my

dreams but also met the needs of others. It was a poignant reminder of the power of pursuing one’s passions and breaking down barriers. Transitioning from corporate finance to pioneering payroll services taught me invaluable lessons about overcoming mental barriers and following my true passions. Initially met with scepticism about our web-based product, I remained steadfast in my belief in the potential of online payroll services. This journey underscored that true innovation demands persistence and the courage to forge ahead, even when the market hesitates to embrace change.

Listen to Ay ş e’s Women in Payroll Podcast episode

Author: Ayşe Nazmiye Uça

Ayşe Nazmiye Uça is the Founder and Chairman of the Turkish Payroll Association and established Turkey’s first payroll outsourcing company 25 years ago. Her company, Datassist, leads the market in technology-centered payroll services, catering to Fortune 500 companies and major Turkish corporations. Datassist excels in Regulation Technologies (RegTech) and continues to expand through strategic investments and business partnerships, aiming to offer comprehensive services in an evolving market.

This year, Ayşe ranked 20th among Turkey’s top 100 female founders by Fast Company magazine, based on company turnover. Her life purpose is to shape organizations, create new opportunities, and guide her employees toward achieving their career goals.

The Pay System from Hell

8 YEARS OF NO ANSWERS AND NO RESOLUTION

Listen to the podcast

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ISSUE ISSUE 2

Latest From the States: Proposals Would Mean

Author: Michael Baer

Making tips nontaxable would impact several tasks for those paying service employees who currently must report their tips as income. Employers are required to calculate and withhold income taxes on tips; money they did not provide (at least not directly) in paying those workers. employees as federal taxable wages and, later, blessed a platform that would eliminate the federal income tax altogether. Tips are different than service charges as they are defined as amounts freely given by a receiver of a service to the individual providing the service. Employers are allowed to pool the tips for service staff, but the full amount must be delivered to the employees, without taxes and other deductions. Running to become the U.S. president again, Donald Trump in June proposed an initiative to no longer record tips to

GLOBAL PAYROLL MAGAZINE

: What Trump’s Tax n for Payroll Operations

Additional taxes and deductions get taken from the employee’s base wage paid by the employer, dropping net pay for tipped workers below what a similarly paid non-tipped worker would receive. This is because the tip amounts are to be added to gross wages before taxes are withheld.

“Making tips nontaxable would impact several tasks for those paying service employees who currently must report their tips as income.”

A basic principle of the U.S. tax code is that most cash or cash equivalents paid to workers are subject to income tax. Excluding these amounts from calculating taxable wages means several accumulators in Payroll systems would no longer be necessary, many forms and documentation requirements would go away, and additional withholding calculations that include tips with regular wages also would disappear.

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“Days after telling supporters to write “no tax on tips” on bills for service, Trump, in another proposal, would modify the tax code so that income taxes would be essentially replaced by tariffs on imports.”

The change could shine new light on what types of transactions can be characterized as tips, and taxpayers may seek to more loosely define the term to avoid taxes on those amounts.

amounts would alleviate a big part of Payroll’s gross-to-net calculation before payday, and income tax annual reconciliation and reporting would cease. State and local requirements would likely continue. Labor laws, like the minimum wage, overtime, and pay date requirements would remain, as well as the Social Security and Medicare taxes. While president, Trump put forward a paid leave plan for new parents that did not get the support needed to pass Congress and be enacted into law. It can be interesting to speculate on the impact his latest proposals could have on Payroll in the U.S. However, campaign promises often end up as just promises that are not fulfilled.

But this would all be moot if no income is to be taxed.

Days after telling supporters to write “no tax on tips” on bills for service, Trump, in another proposal, would modify the tax code so that income taxes would be essentially replaced by tariffs on imports. With no income tax, there definitely would no longer be a tax on tips. Operating without having to monitor, accrue and withhold federal income tax amounts from workers, as well as not having to remit and report those

GPA Training

Join our in-country payroll experts online, in classroom and remotely as they take you through the process of running payrolls in different countries. Stay up-to-date via our courses on in-country payroll and HR topics. Run by our expert trainers around the world.

Introduction to Global Mobility and Globally remote working for Payroll

Global Payroll Associations Certificate in Global Payroll, Leadership, Strategy design and Transformation

Overview of Payroll in Germany

Overview of Payroll in the Netherlands

An Overview of Basic UK payroll Processing

Overview of Payroll in Italy - Basic

In-House Enquiries

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compl

GLOBAL PAYROLL MAGAZINE

Streamlining the lexities of a global workforce

By Rick Hammell

Payroll compliance across a geographically dispersed workforce can be challenging, introducing the need for a centralized solution capable of streamlining complexity

However, it does introduce a measure of complexity. Your business must comply with regulatory requirements across every jurisdiction your talent resides in. You must tick every one of these boxes rigorously and ensure that you remain up to date with changes, so you never slip out of compliance. Unfortunately, these regulations tend to change regularly, which means managing your global workforce also means managing compliance. Your business must adhere to local laws, regulations and industry standards, safeguarding against legal penalties, reputational damage and operational disruptions. Every country has labor statutes, tax laws, immigration regulations and data protection mandates. Each country

A global workforce introduces significant value to the modern organization. Fresh talent brings fresh ideas – a diverse workforce is more dynamic and innovative, delivering measurable financial gains to the business. As McKinsey found, companies investing in diversity outperform those that don’t, to the point where not having a diverse workforce is becoming a distinct disadvantage. The ability to source talent from a wider pool of prospects allows companies to become more competitive and gain access to a wider variety of skills. Global talent resourcing is a smart way for companies to reduce the risk of stagnation, create a more agile workforce and introduce improved problem-solving and creativity to the business.

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has an intricate web of legal and regulatory requirements, and failure to comply with them can lead to expensive consequences. “It’s one thing to recognize how important compliance is and understand that it requires deft management of hours, health, tax, benefits and so much more; it’s quite another thing to create an ecosystem within the business that meets these compliance requirements.” According to Research and Markets, juggling all these balls is a daunting endeavor and very likely one of the primary reasons why the payroll services market has grown so significantly. The anticipated growth for 2024 is $77.63 billion with a compound annual growth rate (CAGR) of 3.2%. This growth is due to the rise of innovative and effective solutions designed to help companies prioritize compliance, cost savings and payroll efficiencies, providing a safety net for businesses in the complex world of regulations.

Maintaining compliance fosters trust among stakeholders, including employees, investors and customers. It enhances your reputation and credibility in the global market, allows you to implement proper controls and processes that improve operations and administration and provides a solid foundation for navigating local laws and cultural subtleties. Compliance also helps to mitigate risk, maintain ethical business practices and tackle the complexities of global workforce management with proactive strategies. Now, the real conversation comes down to how you build this foundation. It’s one thing to recognize how important compliance is and understand that it requires deft management of hours, health, tax, benefits and so much more; it’s quite another thing to create an ecosystem within the business that meets these compliance requirements. The first step is to ensure you know all compliance standards in each country across core areas, including working hours, minimum wage, employee benefits, leave, pay equality, data protection, trade regulations and legal expectations. Then, you must create an operational ecosystem with clearly defined processes, policies and approaches designed to ensure compliance and reduce non-compliance risks. This means a dedicated team focused on sifting through the compliance expectations within each region, so payroll is constantly updated and compliant. You also need a functional and capable legal team with insight into the legal

GLOBAL PAYROLL MAGAZINE

frameworks and documents required to manage your global workforce.

ticking, and you gain the added benefit of building a rich data foundation that you can then use to gain insights into employee performance, operational bottlenecks and areas where you can streamline efficiencies. Payroll technology is an enabler for companies wanting to manage a global workforce better and meet compliance expectations. It will help transform legacy business processes into an accessible and manageable ecosystem where complexities are simplified, and manual tasks automated. With the right technology partner, companies can say a not- so-fond farewell to manual labor, unnecessary costs, and burdensome compliance complications and replace them with an optimized digital framework that makes employee and business life easier.

However, for companies not wanting to hire teams of legal and compliance experts – the cost factor alone can be prohibitive for many – there is the option of investing in a centralized global payroll solution designed to manage the complexities of the global workforce. A payroll management tool designed with global growth and hiring in mind will ensure consistent compliance with national and local laws while synchronizing payroll processes to deliver timely and accurate payments. You want a payroll solution capable of proactively anticipating regulatory changes, centralizing data for rapid visibility and giving you the tools you need to streamline your admin. A global payroll solution can help you automate manual tasks such as data entry and compliance checks. This alone will reduce time spent on admin and help reduce the risk of errors. Your payroll teams can then prioritize employee engagement over box-

Author: Rick Hammell

With over 16 years of experience in Global HR Operations management, Rick Hammell is currently the Founder and CEO of Helios, a new HCM and Payments platform launching later this year. He is also the Founder of Atlas, an HR Tech company he established in 2015. Driven by his dedication to streamlining global expansion, Rick pioneered the innovative Direct Employer

of Record business model, specifically designed to support companies with ambitious international aspirations, while fostering equitable opportunities for businesses to compete on a global scale.

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ADVERTORIAL

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Managing a Multi- Currency Workforce in

Navigating Diversity for Suc

In recent years, the landscape of business operations has evo globalization opening up new opportunities for companies t diverse markets.

One region that has garnered increased attention from businesses worldwide is Africa. With its rich pool of talent, growing economies, and untapped potential, Africa presents an attractive proposition for companies looking to establish a presence in the region. However, managing a multi-currency

workforce in Africa comes with its own set of challenges and complexities. In this article, we explore how businesses can effectively navigate these challenges to harness the benefits of hiring and operating in Africa.

GLOBAL PAYROLL MAGAZINE

ccess

volved significantly, with to expand their reach into

The concept of a multi-currency workforce refers to employing individuals across different countries who are paid in various currencies. In Africa, this concept is particularly relevant due to the continent’s vast geographical and cultural diversity. As businesses increasingly recognize the value of tapping

into African talent, understanding the intricacies of managing a multi- currency workforce becomes crucial. By doing so, both employers and employees can benefit from enhanced operational efficiency, cost-effectiveness, and access to a broader talent pool.

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Understanding Currency Landscape in Africa Africa boasts a wide array of currencies, ranging from the well-established to the lesser-known. Some of the prominent currencies include the South African Rand (ZAR), Nigerian Naira (NGN), Egyptian Pound (EGP), Kenyan Shilling (KES), and Ghanaian Cedi (GHS). However, alongside these major currencies are numerous others, each reflective of the unique economic and political landscapes of their respective countries. Regional Currency Blocs Recognizing the benefits of regional integration, several African countries have formed currency blocs to promote economic cooperation and facilitate trade. One notable example is the Economic Community of West African States (ECOWAS), which aims to establish a common currency, the Eco, for member states. Similarly, the Southern African Development Community (SADC) has proposed the creation of a regional currency union to enhance economic stability and foster greater integration among member countries.

Challenges and Opportunities of Multi-Currency Operations in Africa Expanding into Africa brings forth a multitude of opportunities for businesses, but it also presents unique challenges, particularly when it comes to managing a multi-currency workforce. This section delves into the complexities of multi-currency operations in Africa, highlighting both the challenges and the opportunities that come with it.

Complexities of Managing a Multi- Currency Workforce:

1. Fluctuating Exchange Rates: One of the primary challenges of managing a multi-currency workforce in Africa is navigating fluctuating exchange rates. Currency volatility can have a significant impact on business operations, affecting everything from payroll management to budgeting and financial forecasting. Businesses must devise strategies to mitigate currency risk, such as hedging against exchange rate fluctuations or diversifying currency holdings.

“Alongside these major currencies are numerous others, each reflective of the unique economic and political landscapes of their respective countries.”

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“From tax laws to foreign exchange controls and labour regulations, businesses must stay abreast of evolving regulatory frameworks and ensure compliance to avoid costly penalties or legal disputes.”

2.Payment Processing: Processing payments across multiple currencies can be a cumbersome and time- consuming task. Businesses must contend with varying payment processing systems, international banking fees, and transaction delays, which can impede cash flow and hinder business operations. Implementing efficient payment processing systems and leveraging technology solutions can help streamline the process and reduce administrative overhead.

3.Financial Regulations: Operating in multiple jurisdictions requires businesses to navigate a complex web of financial regulations and compliance requirements. From tax laws to foreign exchange controls and labour regulations, businesses must stay abreast of evolving regulatory frameworks and ensure compliance to avoid costly penalties or legal disputes. Engaging with local legal counsel and financial experts can provide businesses with the guidance and support they need to navigate regulatory complexities effectively.

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Opportunities for Cost Savings and Market Expansion:

3.Market Expansion: Operating in multiple currencies opens doors to new markets and customer segments, enabling businesses to reach a broader audience and expand their market presence. By paying employees or contractors in local currencies, businesses can overcome barriers to entry and gain a competitive edge in emerging markets. Strategies for Managing Multi- Currency Payroll in Africa Managing multi-currency payroll in Africa requires a strategic approach that combines technological innovation with clear communication and transparency. In this section, we’ll explore practical strategies for businesses to set up efficient payroll systems that accommodate multiple currencies while ensuring transparency and communication with employees.

1. Diversification of Revenue Streams: Operating in multiple currencies allows businesses to diversify their revenue streams and reduce dependency on any single currency or market. By expanding into new markets and accepting payments in local currencies, businesses can hedge against currency risk and capitalise on market opportunities, driving revenue growth and profitability.

2.Cost Savings: Multi-currency operations offer opportunities for cost savings and optimization. By strategically managing currency

exposures and leveraging favourable exchange rates, businesses can reduce transaction costs and maximize the value of their foreign currency holdings.

“With the right partner, businesses can streamline payroll processes, ensure compliance, and focus on core operations efficiently.”

GLOBAL PAYROLL MAGAZINE

understand the value of their earnings and can plan their finances accordingly. Clear Payment Schedules: Establish clear payment schedules and deadlines to ensure that employees receive their wages on time. Communicate payment dates, frequency, and methods of payment to employees in advance, and provide regular updates on any changes or delays. Clear communication of payment schedules helps minimize confusion and uncertainty among employees, ensuring that they can budget and plan effectively. Accessibility and Support: Provide employees access to resources and support for navigating multi-currency payroll processes. Offer training and guidance on how to read pay statements, understand currency conversions, and address any concerns or questions they may have. By empowering employees with the necessary knowledge and resources, businesses can foster a culture of transparency, accountability, and trust in payroll management.

1. Setting Up Efficient Payroll Systems: Choose the Right Payroll Partner: Selecting the ideal payroll partner is crucial for effectively managing multi-currency payroll in Africa. Seek a partner with deep experience in African markets and strong systems for accurate and compliant handling of multiple currencies. With the right partner, businesses can streamline payroll processes, ensure compliance, and focus on core operations efficiently. processes and procedures to ensure consistency and accuracy across all locations. Implementing standardized processes helps reduce administrative overhead and ensures compliance with local regulations. Centralize Payroll Management: Centralize payroll management to consolidate data and streamline operations. By centralizing payroll functions, businesses can maintain a single source of truth for payroll data, simplify reporting and reconciliation, and improve efficiency. Standardize Payroll Processes: Establish standardized payroll

2.Importance of Transparency and Communication:

Source: Talent PEO Africa

Transparent Currency Conversions: Provide employees with transparent and timely information about currency conversions and exchange rates. Clearly communicate how currency conversions are calculated, including any fees or charges involved. Transparency in currency conversions builds trust and confidence among employees, ensuring that they

Talent PEO Africa is a one-stop HR and payroll solution for companies seeking to ease their payroll and tax burdens for employees in Africa or expand into the region. Linkedin

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UK Payroll: Tax Planning and Avoidance Measures Becoming Prevalent

Author: P Simon Parsons

As with most of the world, the United Kingdom has been going through its own Cost of Living crisis. Inflation has fallen to a three- year low of 2% from its recent peak of over 11%. Food remains 25% higher than in 2022. Interest rates are high at 5.25% with an expectation of reduction starting in August 2022. Millions face increasing mortgage costs as their current (and unusually very low) fixed rate deals come to an end. The reality is that the current rates being experienced are favourable when compared to mortgage rates over past decades.

So what has this got to do with payroll? Increasingly employers and their

collected as an advance recovery in the next pay cycle.

employees have been looking at means to save money or access their hard-won earnings early. Over the past two to three years, it has become more common to see US model wage advance schemes being heavily promoted. A method utilising a loophole of PAYE by giving unregulated credit to employees loaned from money businesses (often for a fee) to be

HM Revenue and Customs (HMRC) has relaxed the RTI on or before reporting requirements for such advances to prevent some of the taxation and National Insurance difficulties with advancing so-called wages. Some of the noise around them appears to have died down. There are still unanswered questions about the impact of the associated advance fee and how payments out of the pay reference

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period affect National Minimum Wage regulations.

and sell, and cars with under CO2 75g emission leading to the popularity of EVs (electric vehicles) and some childcare-related benefits (if qualifying). With this popularity, a number of pop- up organisations are now harvesting the market with new and innovative salary sacrifice arrangements to make a mint! However, these don’t appear to meet the OpRA exempt list or meet the qualifying criteria. HMRC has issued notes around so-called workplace

Although this space has become quieter, I’m sure we will hear more in the future.

Salary Sacrifice schemes increasingly prevalent

Salary Sacrifice, flex and other Optional Remuneration Arrangements (OpRA) under type A or B are popular. The base HMRC PAYE rules approved items of: pensions, Cycle to Work, holiday buy

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nurseries that don’t appear to have much to do with the employer or the workplace and look like avoidance. Broad promises of significant savings are made when the reality may cost a small fortune as a failed sacrifice. There are promises of grocery salary sacrifice to save the National Insurance contributions on the amount foregone, however, the provision of the shopping voucher is subject to benefit tax and Class 1 NIC within payroll – so whether or not there is a saving, employers are having the wool pulled over their eyes by some organisations seeking a quick buck. With all the rain in England – you need an Umbrella The major talk around 10 years ago was that we would all be working in the gig economy, that we would look up on our mobile where and who we are working for today and have it be entirely our choice when we want to be available. Although the proportion of workers “HMRC are investigating a number of promoters of these ‘Tax Avoidance schemes’. Its list of 77 is long yet not full or comprehensive.”

operating through the gig or casual model has increased, the general position on steady employment hasn’t changed that much. While 9-5 may no longer be the norm for many, for the majority working for a single employer on the whole remains prevalent. Now an area with some sharp practices that HMRC has increasingly been alarmed at is the umbrella market, used by some main employers and especially by agencies for agency staff. Of course, all these organisations will work in a fully compliant way, some have even formed their own professional organisation to accredit. The surprising aspect is how often these types of arrangements fall within elements of the UK public sector organisation, not at main government department levels, but certainly in use by groups within the Health arena. So what is wrong with the umbrella? For a proportion, very little, although their operations can appear very confusing to the employee recipient with their employer being separate from where they work, and with all employment rights being funded out of their agreed service arrangement fees. With the cost of living crisis, and taxation at its highest levels - schemes promoting avoidance and potentially

GLOBAL PAYROLL MAGAZINE

or comprehensive. HMRC continues to investigate other so-called promoters of ‘Tax Avoidance’ as part of its effort to close the ‘Tax Gap’. Improving the tax advice market Due to what may be seen as a high number of payroll promoters in the Umbrella space pushing through broken tax avoidance measures and a social media frenzy of Tax Reclaim agents - where most of the claim appeared to be retained by the agent who used some ancient legal financial vehicles which have not been curtailed from use - the UK government was rapidly promoting changes in law to monitor and police the Tax Advice Market. So what has that to do with the UK payroll profession? – Oh, payroll is considered part of the Accountancy Service Provider industry and may well fall smack into the middle of the tax advice market space that is facing mandatory professional membership.

even scams are being marketed and badged as fully compliant, which may be the opposite of the truth. A whole section of Umbrella organisations have been found to be promoting or applying tax avoidance measures which HMRC claims do not work. Often by paying amounts at National Minimum Wage levels with tax and NICs being applied only to those amounts. And then further amounts are paid as tax and NIC-free claiming they are other: fees, loans, options or other types of advances. The risk for the employee is that they may receive a significant taxation bill once all the threads are unwound to show what is really going on. HMRC are investigating a number of promoters of these ‘Tax Avoidance schemes’. Its list of 77 is long yet not full

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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Recent Refo Future Trends: T Wage Protectio

GLOBAL PAYROLL MAGAZINE

The U.A.E.’s Wage Protection System (“WPS”) has proved to be a game changer for the U.A.E.’s payroll industry. This article will cover the introduction of WPS in the UAE, and examine recent reforms to the system, along with anticipated future trends. What is WPS? First introduced via Ministerial Decree No.788/2009 (“Decree No.788/2009” ), WPS came about as a product of collaboration between the Ministry of Human Resources and Emiratization (“MOHRE”) and the Central Bank of the U.A.E. (“CBUAE”) . While the system was originally mandated only for onshore companies, Jebel Ali Freezone (“JAFZA”) was the first free zone to opt in to the system in 2012. WPS acts as an electronic wage transfer system that facilitates the payment of employee salaries, in an effort to ensure they are paid in an accurate and timely manner. The system requires companies to transfer employee salaries through WPS agents, who are financial institutions authorized by CBUAE. After companies submit a salary information file (“SIF” )

orms and The UAE’s on System

By Thenji Moyo and Dilini Loku

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“By streamlining salary disbursement, WPS minimizes the effort needed by companies to manage employee salaries.”

to the WPS online database, the WPS agent sends the SIF to CBUAE and MOHRE (if the company is located onshore) for approval. Upon receiving approval, the WPS agent oversees the salary transfer to employees. The benefits of WPS extend not only to employees but also to companies. By streamlining salary disbursement, WPS minimizes the effort needed by companies to manage employee salaries. Furthermore, abiding by WPS and its requirements enables companies to build trust between themselves and their workforce, which may lead to lower turnover rates and higher levels of productivity - both of which are key to a company’s growth. Recent Reforms WPS has seen numerous reforms since its inception, with the most recent being brought about through the issuing of Ministerial Decision No.598/2022 Concerning the Wage Protection System (“Decision No.598/2022”) on 20 December 2022. Decision No.598/2022 introduced key changes regarding the repercussions companies may face for failing to pay employee wages by their due date. Under the now repealed Ministerial Resolution No.346/2022 Regarding the Amendment of Certain Provisions of Ministerial Resolution No.43/2022

Regarding the Wages Protection System (“Resolution No.346/2022”) , the following penalties were imposed: 17th day following the due date : Offending companies will not be issued new work permits, significantly affecting their ability to recruit new employees. For companies with more than 50 employees: companies will also be listed in the electronic monitoring and inspection system & inspection visits schedule and face subsequent inspection. 30th day following the due date : For offending companies with more than 50 employees, the public prosecution will be notified, and the company’s information will be sent to the relevant federal and local authorities for legal action. 4 months following the due date : The work permit ban will extend to other companies exclusively owned by the offending company’s owner. For repeating violations within 6 months : The offending company will be downgraded to category (3) in accordance with Ministerial

resolution No.209/2022 On the Classification of Establishments Under the Third Category.

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the fines that may be simultaneously imposed upon non-compliant companies under Cabinet Resolution No.21/2020 Concerning Services Fees and Administrative Fines in The Ministry of Human Resources and Emiratization ( “Resolution No.21/2020” ). Resolution No.21/2020 states that companies who fail to pay their employees within the specified period will face fines of AED 1,000 per employee, with a maximum of AED 20,000. Furthermore, it stipulates that if a company forces employees to sign false documents stating they received their wages or attempt to insert false data into WPS, a fine of AED 5,000 per employee will be imposed with a maximum of AED 50,000. Future Trends The U.A.E. was the first country in the Middle East to implement WPS. The system quickly gained popularity in the MENA region, with multiple countries following suit; Bahrain in 2019 being the latest. However, WPS has not been utilized in the majority of U.A.E. free zones despite its regional popularity. The absence of WPS or a similar system in the majority of free zones may leave employees vulnerable. However, this may soon change, as some free zones have begun to opt into WPS or have opted to utilize similar schemes. For example, The Dubai Multi Commodities Centre ( “DMCC” ) chose to implement WPS in February 2023, while the Dubai Airport Freezone ( “DAFZ” ) recently announced its adoption of an employee payroll system. The payroll industry may continue to see more free zones follow suit, meaning that it is important for payroll professionals

In contrast to the above, Decision No.58/2022 adopts a less restrictive approach, such as: Removing the penalty of prohibiting the issuing of new work permits to other exclusively owned companies by the owner of an offending company once 4 months from the due date passed. Stipulating that the public prosecution will be notified 45 days after the due date has passed for offending companies with more than 50 employees, rather than 30 days. Rather than imposing the penalty of downgrading to category 3 on all companies who repeated violations within 6 months, only applying it to companies who have wage-related complaints referred against them. This is especially significant, given that companies within category 3 pay substantially higher fees for renewing work permits. Previously, the penalty of being downgraded to category 3 applied to all companies who repeated violations within 6 months. Now, this penalty only applies to companies with repeated violations that also have wage-related complaints made against them. While some may caution softening penalties puts employees at risk, it may create balance and ensure penalties upon companies are not overly harsh. Furthermore, the penalties under Decision No.598/2022 are supported by

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to understand how WPS works, the benefits it presents to both employees and companies, and the consequences of non-compliance. In conclusion, WPS has significantly transformed the U.A.E.’s payroll industry. The system has benefited employees by facilitating timely and accurate salary payments, while also assisting companies by streamlining

disbursement. While decision No.598/2022 has softened the penalties to be imposed upon companies, it may have created a more balanced approach, allowing for compliance to be encouraged without unduly burdening companies. The growing adoption of WPS within free zones indicates a promising trend towards broader protection for employees across the U.A.E.

Authors: Thenji Moyo and Dilini Loku

Thenji Moyo (Partner) Thenji Moyo is an award-winning lawyer who heads the Gateley legal employment practice and is a qualified specialist Partner advising on all U.A.E. and DIFC employment law. Having worked in the U.A.E. for over 10 years, Thenji advises numerous blue chips, multinational, regional, local and private clients from all industry sectors on complex legal issues. Thenji was awarded the Employment Lawyer of the Year at the

inaugural G.C.C. Lexis Nexis Women in Law Awards for her outstanding contributions to the legal industry. Thenji has a keen interest in uplifting diversity and inclusion in the workplace and was awarded the Equality Initiative of the Year at the first Lexis Nexis Women in Law Awards and the Middle East Legal Awards 2022.

Dilini Loku (Senior Associate) Dilini is a UK-qualified lawyer who joined Gateley in 2023 as a senior associate for employment. With over a decade of experience, Dilini has advised various businesses on complex legal queries relating to employment and pensions law, ranging from start-ups to multinational companies. She has also provided guidance in relation to restructuring, reorganisation, redundancies, transfer of employees, global mobility solutions,

senior executive appointments, and terminations. Dilini is well versed in all aspects of non-contentious employment law, as she has routinely advised on and drafted employment contracts, director service agreements, consultancy agreements, business protection agreements, non-disclosure agreements, employment policies, and procedures. She is also instructed on employee benefit design matters, with a particular focus on employee share option schemes.

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Neurodiversity in the Workplace – a Superpower for Payroll By Victoria Thatcher

As neurodiversity diagnoses increase by approximately 787% are you missing a trick by not being inclusive to an exceptional talent pool?

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In recent years, the concept of neurodiversity has gained significant attention and recognition in various industries, including payroll. Companies such as Google and Microsoft have created initiatives to get more neurodiverse people into their workforces, recognising the wealth of talent they can bring. Neurodiversity refers to the natural variations in the human brain that lead to differences in learning, thinking, and behaviour. It encompasses conditions such as autism, ADHD, dyslexia, dyspraxia, and more. Embracing neurodiversity in the workplace not only promotes inclusivity it also unlocks a wealth of unique talents and perspectives, particularly valuable in fields like payroll where precision, pattern recognition, and problem- solving are crucial. I prefer to think of neurodiversity as a testament to the richness of human variety and simply the natural difference in how some individuals think, process information, and perceive the world. Everyone has a different normal and that’s ok. It’s what makes us all so special and unique, right?

As someone who has seen first-hand the sheer potential neurodiverse individuals have, I am passionate about the value of a neurodiverse team and spreading that message to all. It’s a two-way street There is still a real stigma around neurodiversity, particularly when people hear “autism” or “ADHD” they seem to default to only seeing problems (In 2020, 50% of managers surveyed said they wouldn’t hire a neurodiverse employee, and in 2023 a survey showed that 65% of surveyed neurodiverse employees said they fear discrimination in the workplace). I had a hiring manager call me woke when I referred to neurodiversity in a job interview once, which was very disappointing coming from a global employer in 2024. I thought to myself at the time “I definitely wouldn’t feel valued and wouldn’t give my all for that company if that’s what their attitude is like”. When you employ someone with neurodiversities you are hiring someone who is extremely talented. They will most likely have an innate

“Embracing neurodiversity in the workplace not only promotes inclusivity it also unlocks a wealth of unique talents and perspectives, particularly valuable in fields like payroll where precision, pattern recognition, and problem-solving are crucial. ”

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