04:05 GLOBAL
Tax and labour laws: From end-of-service entitlements to mandatory benefits, payroll touches on some of the most tightly regulated areas of employment, with mistakes attracting heavy penalties. AML and KYC obligations: To prevent fraud and money laundering, regulators demand rigorous checks on payers and payees. In the UAE, banks and payment providers must verify beneficiary identities and monitor transactions for suspicious activity under strict AML and KYC rules. Failure to comply can result in fines, account freezes, or legal action. Building Compliance into Every Step The most effective way to mitigate risk is to incorporate compliance directly into your payroll payment process. That means creating a framework where every transaction is validated, recorded, and aligned with current regulations. Key practices include: Validating beneficiary data Meeting AML and KYC requirements Maintaining audit-ready records Using real-time monitoring
accurate records... No one knows better than payroll professionals that this is far from the case, and cross-border payments introduce a host of extra nuances. Here are some of the twists and turns to consider: Data privacy requirements: Such legislation is rife with subtle variations. GDPR in the EU and Singapore’s PDPA, for example, both protect employee data, requiring consent, limited use, and secure handling, yet they differ in scope and specific obligations. It is essential to be
able to differentiate them. Different banking rules: Payment formats, clearing
systems, and cut-off times vary by country, creating risks of delays, failed transfers, or additional fees, all of which can disrupt payroll and impact employee trust.
Regulations evolve constantly, and in many markets, updates appear with little notice. What was compliant yesterday may trip you up tomorrow.
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GLOBAL PAYROLL MAGAZINE ISSUE 15
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