Global Payroll Confronts Big Compliance Challenges


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The U.S. by far is not the only country with complex laws and regulations that challenge payroll professionals, leaders of four countries’ payroll associations said May 17.

Increased awareness of particularly challenging aspects of performing payroll abroad may enhance multinational compliance, they said.

A new apprenticeship levy in the United Kingdom, which took effect April 6, 2017,  has been a challenge for some payroll professionals, said Eira Hammond, chairwoman of the Chartered Institute of Payroll Professionals in the U.K. The levy  is assessed on employers with annual payrolls of more than 3 million pounds ($3.9 million).

Numerous payroll professionals also have been tasked with processing data to fulfill another challenging requirement that took effect in the U.K. in April 2017, gender pay-gap reporting, in which employers with at least 250 employees must aggregate pay data for men and women and report the data to the government so that it can be available online, Hammond said at the annual American Payroll Association Congress in Orlando, Fla.

As of May 18, publicly accessible data for only seven U.K. employers have been published on the government’s gender pay-gap reporting page, with the number of employers with data accessible on the page expected to significantly increase for data reporting in 2018. The page indicates the percentages by which the mean and median hourly pay rates for women at the companies were lower or higher than those of men. 

A prominent payroll challenge in Canada is tracking updates to not only national laws and regulations that affect payroll, but requirements of the country’s 10 provinces and three territories that affect payroll, said Lucy Zambon, chairwoman of the Canadian Payroll Association.

Payroll administration in the Canadian province of Quebec is challenging for some employers that primarily operate outside the province because French, and not English, is the prevalent language in Québec, whereas English is the prevalent language in Canada’s other provinces, Zambon said. About 80 percent of the population of Québec speaks French as a first language, whereas French is the first language of about 4 percent of the total population of other parts of Canada, according to Statistics Canada.

Complexity of legal requirements is a major challenge for payroll in Australia, where minor, unintentional mistakes regarding payroll compliance may cause employers to owe millions of Australian dollars in penalties, said Jason Low, head of the Association for Payroll Specialists in Australia. As of May 18, the exchange rate between Australian and U.S. currency was that one Australian dollar was worth about 74 cents.

Last-minute changes to legislation before passage in South Africa have been particularly challenging for payroll professionals tracking the legislation, said James McKerrell, chairman of the South African Payroll Association.

Whenever a law is enacted that causes payroll professionals in South Africa to need to examine payroll records from before the law was enacted to ensure that an employer is fully complying with provisions of the law, balancing that reconciliation with other payroll responsibilities as well may be challenging for payroll professionals in the country, McKerrell said.

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