Sometimes attending a conference can be equated to being at a reception and filling up on the various small food offerings and hors d’oeuvres. What I’ve found is that eating a bunch of nibbles and bites can be quite nourishing and may even replace dinner. That’s the good news of how I feel after attending the 2016 Virginia Statewide Payroll Conference, held Oct 6-7 in Portsmouth, Va. The bits and pieces from attending added up to a pretty big takeaway from the conference related to the concept of scope.
For our purposes at Bloomberg BNA, to continue to provide relevant material on payroll we constantly are asking whether issues legitimately are payroll functions, compared with what may be primarily human resources or tax. When does payroll start or end? What do our users need to know, as opposed to what is nice to know? There is so much noise out there that people should have a vehicle that already sifts the wheat from the chaff, so to speak. And we want to be that vehicle.
Overall, from what I have observed, payroll remains the implementer of much of an organization’s compensation plan, and that means the department is responsible for accurately collecting employee data and work information to determine gross pay. Payroll is a key player in meeting an organization’s tax obligations by ensuring taxes are deducted, other deductions that are associated with those amounts are done and that wage payments are timely and accurate. At the back end, payroll needs to provide those amounts in various information reports to corporate and government authorities, as well as to workers.
So what has changed? This question comes up with increased automation and the use of third parties to handle certain aspects of the payroll function. Do payroll professionals still need to know how to carry out a process specifically when the role has changed to being overseers of processes that may be outsourced or otherwise automated? Are these farmed-out processes no longer in the scope of payroll?
The answer for many employers is that while various parts of payroll may be outsourced, that does not mean these bits and pieces are no longer considered part of the payroll function, regardless of what employers may hope for. The obligation to monitor continues and the liability remains with the employer.
For example, conference attendees learned that just because an employer outsources garnishments does not mean the employer’s requirement to be duly diligent in ensuring the garnishments are handled properly goes away, according to Willis Towers Watson’s Charlotte Hodges, CPP.
Fairfax County’s Linda Dailey, CPP, said at a different session that knowing the proper way to calculate overtime for various situations not only is necessary for the American Payroll Association’s Certified Payroll Professional exam, but also is needed to check any automated calculations for accuracy. Because systems can get it wrong.
(This reminded me of an issue with the state of Maryland where automated systems allegedly failed to properly determine the regular rate of pay for a large number of workers, resulting in likely $5 to $10 shortfall on many paychecks over several years, which adds up to a hefty sum. But I digress.)
The Affordable Care Act’s employer shared-responsibility requirements uses several data points from payroll systems. Required reporting to the Equal Employment Opportunity Commission soon will include Forms W-2 and hours-worked data. The timekeeping process and accounting for accruals of paid time off continue to be aspects of payroll that get more complicated, especially as more jurisdictions require time-off plans in specific ways. New-hire requirements truly are part of human resources, but we continue to recognize that some in payroll have been given the opportunity to administer new-hire information because the payroll Form W-4 is the starting point for much of this data.
All these processes can be handled by a vendor in some way, but the responsibility for ensuring the processes are done timely and correctly remain squarely with the employer and those charged with overseeing the payroll function.
The answer I got from the nibbles I ingested at the conference was that no, payroll’s scope is not really narrowing with automation and outsourcing, but rather evolving and maybe even broadening.
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