GLOBAL PAYROLL MAGAZINE
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which in turn can adversely impact business partnerships and future opportunities. Operational disruptions are another consequence as authorities may conduct audits and investigations, potentially freezing company accounts and halting day-to-day functions. Employee dissatisfaction resulting from inaccurate or delayed payments can lead to higher turnover rates, reduced productivity, and labor disputes, further disrupting operations. Additionally, companies out of compliance may face increased regulatory scrutiny and audits in the future, imposing ongoing administrative burdens. Ultimately, the responsibility for ensuring global payroll compliance rests with various stakeholders within an organization. Executive leadership, such as the CEO and CFO, bear the highest level of responsibility, setting the compliance tone and ensuring resource allocation. Human Resources (HR) and payroll departments manage daily payroll processing and compliance checks, while legal and compliance teams offer advisory support and conduct regular audits. The finance department oversees financial transactions related to payroll and ensures tax compliance, whereas local management and regional offices ensure adherence to specific geographical regulatory requirements. If payroll functions are outsourced, third-party vendors must be reliable and knowledgeable about local compliance requirements, with service agreements clearly outlining compliance responsibilities and penalties for non-compliance.
To mitigate non-compliance risks, organizations should invest in regular training and updates for HR, payroll, and compliance teams on global and local payroll regulations. Leveraging automated payroll systems can enhance accuracy and timeliness, reducing human error. Regular internal audits help ensure ongoing compliance, while clear policies and procedures around payroll governance provide guidance. Engaging with local legal and payroll experts can also assist in navigating complex regulatory environments. In conclusion, while ultimate responsibility lies with executive leadership, achieving global payroll compliance requires a collaborative effort across multiple departments and stakeholders within the organization.
Author: Keith O’Brien
Keith is a Senior Global Payroll Compliance Manager in the Global Payroll
& EOR space with proven payroll transformation experience and a subject matter expert in complex payroll processing environments. His experience includes Global Payroll Operations leadership in 60+ countries, including major project management in the areas of Stock Options and RSUs. Keith has overseen employee services, business process re-engineering, automation, vendor management & consolidation.
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