Professional May 2021

Compliance

when employees leave the employment. Unfortunately, the payroll department do not have a crystal ball, so if they are not notified that an employee has left, or is leaving the business mid-pay-period, then the employee will remain on the payroll. Where this employee receives a pre-set amount of pay each pay interval, it is highly likely that this will be paid if no leaver notification has been received. A recommendation from the CIPP would be for businesses to produce a ‘leaver checklist’ to be completed each time an individual is due to leave. In this checklist, there should be a step that involves notifying payroll of the change. Again, education would be fundamental in the success of this process, as staff would need to be aware of the existence of the checklist, and where they can locate it. The CIPP Advisory team receives multiple enquiries from members regarding overpayments when an employee has chosen to take a period of parental leave. If, for example, an employee is entitled to statutory maternity pay, or no pay at all via payroll whilst on leave, then if payroll has not been notified of the circumstances there is a strong chance that the end result is an overpayment. Again, robust procedures and

processes should be implemented within organisations relating to parental leave, to ensure that the payroll department is notified in sufficient time to account for any changes to pay. The same applies where employees are absent due to illness and are maybe only entitled to statutory sick pay, or no pay at all. ...evident that a lack of communication is the fundamental cause of overpayments. Where employees change their hours there is also a high risk of overpayment should payroll not be advised. This links closely to parental leave, as parents returning to work regularly opt to reduce their hours to spread their time between working and caring for their child/children. If a set amount of pay is given automatically each pay period, overpayment could potentially occur if the change has not been accounted for within the payroll system. There are actually

prescribed periods of notice that employees must provide to employers where they wish to return to work, and amend their hours, so, if these timeframes are adhered to there is no reason why payroll should not be notified in sufficient time for the necessary changes to be made. Conclusion A clear pattern is emerging, and it is evident that a lack of communication is the fundamental cause of overpayments. There are steps that payroll departments can take to try and ensure that payments are as accurate as possible, but they have no chance of succeeding and eliminating any overpayments unless they are advised of changes that will impact pay, within appropriate timeframes. Further education needs to be provided within businesses to try and tackle the issue of overpayments, and to dispel the myth that payroll professionals do nothing more than ‘push a button’ each pay period. An enhanced awareness of what the payroll team do may ultimately lead to further appreciation of their role within a business, which, as we have seen on an even bigger scale because of coronavirus, is a key one. n

Why 6 April? A brief history…

I n 1582, pope Gregory XIII decreed that in the year in which the ancient Roman Julian calendar was discarded, and the new Gregorian calendar adopted, ten days be cut. The purpose of this served, amongst other things, to broadly align 25 December – being the day the Roman church celebrated the Feast of the Nativity – with the winter solstice in the northern hemisphere. Although the Julian calendar generally added a leap day every four years it did not do so when the year was a centennial (e.g. 1700), which over time led to substantial discrepancy in the coincidence of religious festivals (including Easter) and various events. The Gregorian calendar ensured a leap year every four years, even at the turn of each century. In 1750, Great Britain introduced the Calendar (New Style) Act for the primary purpose of “correcting the calendar now in use”. The Act also settled the position of the leap year date as 29 February, and the legal start of each year as 1 January.

The Act stipulated that Wednesday, 2 September 1752 be followed by Thursday, 14 September 1752 thereby eliding eleven days. The extra eleventh day arising because of the delay adopting the Gregorian calendar. In addition, the Act ordered that civil and market days (e.g. quarter days) be moved forward by eleven days so that no-one should gain or lose and that markets match the agricultural season. In Britain, quarter days fell on: 25 March (Lady Day); 24 June (Midsummer); 29 September (Michaelmas); and 25 December (Christmas). Quarter day 25 March was a particularly significant date commercially and financially, as rent fell due, salaries paid, and new labour contracts agreed. This date was also effectively the end of the tax year. The Act stated that monthly, quarterly or yearly payments would not become due until the day they would have done had the Julian calendar continued. Thus, due dates were deferred by eleven days,

and the end of the tax year moved to 5 April. Hence, 6 April as the start of the tax year. (Source: Wikipedia (https://bit. ly/3dRF8qw; https://bit.ly/3a7rfDT)) n

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| Professional in Payroll, Pensions and Reward |

Issue 70 | May 2021

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