How Important Is Compliance in Global Payroll?

To put it simply: Compliance is more important, yet more challenging than ever.

Compliance is by no means a new standard to the global payroll arena; it is an inherent aspect of working in the field. However, 74.5 percent of more than 200 global organizations surveyed in Ernst & Young’s “2015 Global Mobility Effectiveness Survey” said that greater insights are needed in global compliance. That result mostly stems from an expanding regulatory environment in which governments are actively seeking additional tax revenue and enhancing their tax tracking capabilities.

The desire for greater insight into compliance likely is because nearly 60 percent of the survey respondents also reported that they faced increased “risks and regulatory requirements” in global compliance in tax, immigration and social security for employees on international assignment.

Ernst & Young focused much of the November 2015 survey, its seventh on the topic, on the role of data in addressing compliance challenges.

Governments around the world are adopting technologically advanced means of monitoring tax, immigration and social security data yet many organizations reported that they are unprepared for heightened scrutiny of employee mobility data. While 73 percent of organizations said they tracked whether employees on international assignment met the business objectives, less than 33 percent said they had the technology to support systems for social security compliance.

The most successful global payroll professionals often are active participants in broader decision-making processes of organizations because of their knowledge of compliance issues related to international assignments, but 18 percent of survey respondents said that they had the technology to support assignment-cost-analysis decision-making.

Organizations continue to expand internationally but the survey emphasizes the fact that the organizations also should be prepared for an ever more rigorous environment for compliance.

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