FEATURE
This issue, Jerome spoke to: ● Liz Lay MSc FCIPPdip FHEA ACIPD, chair of the board of directors, the CIPP ● Dougie MacInnes , payroll manager, Midland Heart ● Maria Mason MCIPPdip , partner, BDO ● Tom Spencer ACIPP , data and compliance manager, Moorepay.
DM: Again, this goes back to the difference between responsible for and accountable for. I believe that NMW compliance sits with the team signing off the payroll. However, no matter where it’s processed, in-house or outsourced, across teams where segregation of duties are in place, there’s a duty of care within those teams to identify where this could be an issue. MM: All parties, from the employer through to the payroll processor, whether provided in- house or outsourced, hold responsibility for ensuring that all regulations, including NMW compliance, are managed accordingly. Most outsourced payroll processors hold data processor responsibility for many elements surrounding payroll. This would typically see the employer retaining responsibility for ensuring the regulations around the payment of NMW are being applied, but a good outsourced provider should be able to give support and check reports to assist clients. It’s difficult for employers to determine the position prior to the payroll being processed and calculated, leaving exposure. TS: Ultimately, this is the responsibility of the client. However, as a payroll provider it’s in our interests to help customers with this, be it reporting within the payroll software, or via methods of education, like blogs, workshops and webinars. How do you ensure there’s consistent compliance when operating multiple payrolls across large teams? LL: Some larger organisations have dedicated compliance officers to review,
Who should be responsible for compliance? Should it sit with senior management or be clearly defined within the remit of the role, regardless of seniority? Liz Lay: Compliance should start at the top, with companies promoting it through every level. Some companies have a dedicated compliance officer or an internal audit function responsible for ensuring compliance and best practice. Dougie MacInnes: There’s a difference between ‘responsible for’ and ‘accountable for’. All colleagues are responsible for compliance. Compliance is a key behaviour that can be learnt and should be part of your role profile, moving from a responsibility to an accountability as you progress into more senior roles. Maria Mason: Regardless of the role an individual carries out within the payroll arena, everyone involved holds a responsibility to ensure compliance is carried out throughout the payroll process. At BDO, we appreciate that we have differing levels of skillsets among our team, so to accommodate this, we ensure all payrolls processed go through several system checks. Payrolls must also be checked by a secondary individual. Tom Spencer: The responsibility for compliance needs to sit with all staff in an organisation. It’s the role of senior managers and compliance teams to ensure we’re providing staff with the correct information, and to provide simple channels of communication for them to raise any issues. We must refresh this message to staff regularly and back it up with a thorough and consistent internal audit process to ensure compliance. How can payroll managers become confident they’re handling off-payroll working correctly, and where can they turn to for help? LL: Reading articles, undertaking research and attending forums, training events or webinars will enable a payroll manager to increase their knowledge in this area. It’s important they know who they can turn to for help and have confidence the
information being provided is accurate. Of course, the CIPP’s Advisory Service is at the top of the list for members to turn to. Her Majesty’s Revenue and Customs (HMRC) also provides guidance, which is online. Payroll managers may belong to a network within or outside of the organisation that they can reach out to for advice and support. DM: Off-payroll working has been around for long enough now that most businesses should have robust measures for dealing with the processes which dictate how the rules need to be implemented. The check employment status for tax (CEST) tool isn’t that difficult to follow, and the CIPP’s advice line is also super helpful. MM: I believe payroll sits well within the accountancy arena because the relevant taxation expertise is available to support the payroll team and our clients in this area and with other specialised taxation elements, which can also be extremely complex. In addition, the BDO national payroll team relies upon support and guidance from professional and recognised bodies, such as the CIPP, to ensure we’re managing these complex areas correctly for clients. It also guarantees our team is always up to date with the latest legislation and regulations. Who’s ultimately responsible for national minimum wage (NMW) compliance – in-house payroll managers / outsourced payroll bureaux, the client / human resources (HR), or someone else? LL: Ultimate responsibility for NMW compliance sits with the company. It will depend upon the company as to where NMW sits, where payroll is placed and how it’s processed for the organisation. Payroll managers must ensure payments made to employees are compliant, based on the information they have. They should provide instruction to the organisation about the information needed to check and monitor that at least NMW is being paid. Clients of outsourced payroll bureaux can’t hold the bureau responsible if they haven’t provided all the relevant information. However, the payroll bureau should ensure the clients know what information they need to provide.
maintain and introduce policies and procedures that adhere to legal and
operational requirements. The audit function in some organisations also encompasses the role of reviewing compliance and recommending changes or improvements, where required. Without a dedicated resource, teams need to work together to review policies and procedures to ensure they’re usable by both new and current team members. Regular training and legislative updates should be provided in areas in which it’s identified the teams don’t have strong knowledge. DM: This starts and ends with how the teams operating those payrolls are managed – managers (at all levels) should know their people, discuss performance, ask for more and ensure there’s consistent, robust compliance in operation. This involves: ● documented processes, that are easy to
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| Professional in Payroll, Pensions and Reward |
Issue 82 | July - August 2022
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