COMPLIANCE
via an EWA platform – is this surprising? While only minimal respondents to the survey indicated they offer EWA, everyone present in the room confirmed they offer this to their employees or as a service to clients, with one participant sharing that 11% of their workforce were signed up to this benefit, and 8% were using it. Everyone around the table agreed that data is key to introducing EWA within organisations and that this data isn’t currently being used enough, but what does that mean? "We can share what may be deemed as inside information about frozen rates and thresholds, to help the wider business strategically plan for a wealth of scenarios, In the UK, there’s a view that EWA will be abused by lower earners, who will draw from their salaries regularly and end up in a cycle of debt. Those offering this as a service, or employers providing this to employees already, would argue differently. They say that those on lower incomes are perhaps better at budgeting and planning than those on middle or higher incomes, and therefore aren’t a concern but would benefit from this service should they have an unexpected expense outside their pay cycle they haven’t budgeted for. They would also challenge employers on why employees cannot access their money once it has been earned. Everyone in the room agreed that if EWA access is being offered, financial support should also be provided by the organisation and that, often this can be provided by the EWA provider. Many have set up rules regarding how much can be drawn down so there’s a level of control to prevent people having no money left by communicating the costs and assessing potential wider business impacts"
pay day. Others have implemented rules which only allow overtime or payments outside of base pay to be drawn down, and there was lengthy discussion around how it could (and should) work. Ultimately, it was recognised that EWA’s popularity in the US and legislation within some European countries to mandate this as an offering to employees, suggests that EWA will only increase in popularity in the UK. As a profession, we’re best placed to lead the development of this as a concept and offering in businesses. Everyone agreed that the data around EWA needs to be better communicated in terms of usage, cost-savings, employee engagement / retention and the impact on workloads within payroll teams. Technology Throughout 2023, there have been several cybersecurity attacks on large organisations, including several payroll service providers. We held a roundtable back in June, and recently launched a new e-learning module on cyber-security for payroll. We said: 'We know we cannot prevent an attack taking place, but what would you suggest to payroll professionals to prepare and protect in the event of a cyber-attack?' It was agreed that cyber-attacks aren’t something you can protect against 100% and that cyber crime is a significant industry which is growing due to its financial value. But there are things that can be done to mitigate against a cyber- attack and there are appropriate ways to respond. In terms of mitigating risk, those in attendance confirmed the importance of ensuring back-up files are stored on a separate server and of having regular penetration testing and testing of business continuity and disaster recovery plans (BCDR). BCDR plans were the main area of discussion, namely in terms of ensuring they’re in place and tested at different stages of the pay cycle. This isn’t only for your own systems, and you should also be asking how (and how often) your suppliers and third parties are testing their BCDR plans. Those around the table linked the importance of the ability to calculate pay manually to these plans. There’s an increased reliance on payroll technology to calculate pay, but what happens when that isn’t available to you because of a
cyber-attack, or for any other reason? You must be able to calculate gross to net pay. Those with experience of cyber crime and recovery confirmed that response plans are critical. As is knowing who you’re communicating to and when, to manage the impact of any attack or loss of system so that customers (whether clients or employees) have confidence in your ability to pay them. Make people aware of what has happened and when / how you’re going to keep communicating with them. Sticking with the theme of technology, we turned our attention to HM Revenue and Customs (HMRC), who abolished the paper submission of P11Ds for the 2022/23 tax year with minimal notice for employers, in line with its ‘digital by default’ approach. We asked: 'Do you feel HMRC is moving in line with technology, and is it moving towards tax simplification and digitalisation?' It was accepted that it’s easy to criticise HMRC, but that the move towards digitalisation is positive, however, its delivery could be improved. Those around the table acknowledged that digitalisation doesn’t necessarily equal simplification and this needs to be treated carefully. Consideration, for example, needs to be given to fields which have a restriction on the number of characters that can be added. Often, names have more characters than fields allow, and this means the process becomes more difficult and time consuming than it needs to be. The field should simply allow for more characters. It was suggested that, as with the pensions dashboards, HMRC explores how other countries are achieving positive digitalisation and learns from those experiences. The panel also recognised that HMRC will always be risk averse in its approach due to the nature of the information it deals with, so anything it develops will take a long time, because of the consideration of many different scenarios which could arise, along with the security which needs to go into development. n
You can see the Future of Payroll Report 2022 , here: https://ow.ly/ n48850Q0aAB and the Payslip Statistics Survey Report 2023 here: https://ow.ly/E64z50Q0aNS.
| Professional in Payroll, Pensions and Reward | November 2023 | Issue 95 36
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