Detailed Responses to Legal Changes Enhance Global Payroll


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The changing landscape of payroll-related requirements among countries around the world necessitates that companies efficiently manage their responses to change, a payroll manager said May 17.  

Global payroll practitioners must respond to legislative and regulatory changes in countries for which they have payroll obligations by developing detailed compliance plans that account not only for specific legal changes, but also for payroll process and technology changes that their payroll departments would need to implement to accord with the legal changes, said Ian Sparrow, vice president, global payroll for Automatic Data Processing, Inc. 

“You need to know what has changed, who in your company will be impacted, when the change will be applied, and how the plan to comply with the change will be executed,” Sparrow said at the annual American Payroll Association Congress in National Harbor, Md. 

“The golden rule is that you will need confirmation that your compliance plan has been executed, and you cannot take for granted that it’s been done,” he said.

Establishing and maintaining a reliable system to make payroll departments aware of legislative and regulatory updates is a foundational component of achieving global payroll compliance, Sparrow said. 

While it generally is more difficult for a payroll practitioner to be fully informed of a country’s payroll-related changes if the practitioner is situated outside the country instead of within, payroll practitioners can help enhance their knowledge of relevant legislative and regulatory updates by activating and sustaining a robust network of in-country experts or applicable third-party support, he said.

To inform companies’ consideration of what payroll process changes are needed and what processes should be preserved in response to relevant legal changes, compliance plans for global payroll change should include many factors by which to evaluate the processes, Sparrow said.

Among the factors are determinations about whether to change the number of processing steps needed to accommodate a payroll-related change, whether to modify any steps, whether to update or otherwise adjust electronic payroll systems, and the extent to which employees should be informed of the change and staff training should be held to help workers adapt to the change, he said.

Implementing a compliance plan for global payroll change should involve completing change-management projects that have defined milestones by which progress may be meticulously analyzed, Sparrow said.

“It’s key to involve all the relevant teams and stakeholders, and to constantly monitor progress so that important parts of executing the plan are not left to chance,” Sparrow said.