Global compliance involves frequent change, so Brazil’s decision to move back timeline for its new eSocial system to January 2018 is a perfect example of the last-minute challenges payroll professionals may face with payroll automation, a management specialist said Sept. 22.
Kira Rubiano, a partner at Celergo LLC, also highlighted several other challenges that employers may face with automation. In certain countries, infrastructure is too underdeveloped to support the new technological regulations. For example, “there is a huge push in Africa toward e-filing but the technology is not quite there so it’s a long ongoing process,” Rubiano said Sept. 22 at the American Payroll Association’s fall forum in Las Vegas.
Other countries, like Russia, have automated processes, but the amount of paperwork required is time consuming. Most documentation in Russia requires an order and employers are repeatedly signing papers, Rubiano said. China and Japan regularly need a stamp or signature whenever a company seal is required, a manual process that hinders automation.
Complexity also may be a challenge for many employers, especially in Switzerland. The system there of insurance and cantons, or administrative subdivisions, can be cumbersome, Rubiano said. “Ironically, France and Brazil, two typically difficult countries for payroll, have started to tackle the complexity issue and are trying to implement integration for governance.”
In Brazil, the eSocial system was created to reduce labor violations and to ensure transparency by requiring electronic reporting of social taxes and labor information. The Declaration Social Normative has a similar purpose in that it automates the manner in which all social declarations are filed which is a huge overhaul to the social system in France, Rubiano said.
Governments are leveraging new technology to centralize and standardize operations, ensure wages are paid, reduce delays and minimize manual processing, Rubiano said.
Global automation has come a long way over the past several decades since the introduction of human resource information systems, said Darin Lowe, director of strategic alliances at Celergo Global. These information systems originated in the 1990s as client server systems and were adopted by companies listed on the Fortune 500, said Lowe, who also spoke at the APA’s fall forum.
Before global systems were developed, Lowe said there was “either no Internet or it was very limited. Client server technology was very slow and systems were very much country specific. The systems were not even integrated for payroll and dual entry was required.”
Looking ahead, data analytics likely will play a bigger role in global payroll automation to bring changes to key metrics, Lowe said.
Ultimately, employers need to focus on investing in software to keep up with new government regulations and more stringent deadlines, especially if performing payroll in house, Rubiano said.
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