We’re all familiar with attention-grabbing headlines chastising businesses for under paying employees, but what about the issue of overpayments? Automating payroll can help to address this problem.
Whenever payroll depends on manual processes the risk of human error goes up – and the domino effect on employers and employees falls both ways: for employers, wage theft is now a criminal matter after Victoria led Australia in legislating the Wage Theft Bill 2020 which took effect from 1 July this year.
Payroll compliance is hard. Even before the complexities of COVID-19 on payroll and government-mandated workforce changes, there were over 120 modern awards and new rules around minimum wage, annualised salary and the casual workforce all requiring regulatory compliance. Now, the pressure to get it right has never been greater.
A panel of HR and payroll experts from HammondCare, Downer and FCB Workplace Law came together recently in a virtual event hosted by WorkForce Software (WFS) Australia to discuss the role of human resources and payroll in staying compliant, and HR industry attendees from across various sectors were invited to participate and respond.
Unsurprisingly, under-resourcing was a major concern, but an even bigger focus was the role of emerging technologies to deliver efficiencies for the triple burden of payroll – accurately recording time and attendance, complying with regulation, and automating data entry.
Are you accurately recording time and attendance data?
Last year, PwC reportedly took the step of asking administrative select staff to clock on and clock off, and while that may sound like a step back in time, the issue they were trying to solve was one of overpayments. Automating time and attendance data accurately ensures employees are meeting their hourly commitments, not working to excess, and being paid fairly for hours worked.
Accurately recording time and attendance for the deskless workforce (eg, healthcare, retail and construction workers) is still a major challenge with the burden of proof on the employer.
Where the bundy clock used to be the only option for accurately recording employee hours, technology is emerging to offer more flexible solutions and a much richer source of data than simply what time a shift starts and ends for each employee. Saas (software as a service) solutions can provide an audit trail if there is ever a dispute, and some vendors offer sophisticated machine learning to enable flexible and responsive forecasting to aid in rostering, for example.
Having workforce information digitally recorded and securely housed gives managers a bird’s eye view in real-time, enabling them to respond to issues such as labour shortages.
Under Australian awards and enterprise agreements, paying workers is fraught with complexity.
Speaking on the WFS webinar panel, Michelle O’Connor, General Manager of Payroll Service at Downer said, “For us, it’s around the interpretation of the complex enterprise agreements. That’s the biggest compliance challenge.”
As the regulatory net tightens, providers need robust systems to not only pay employees fairly, but deliver accurate reporting.
When seeking a software solution, it’s important to make sure it is built on a robust, rules-based engine, meaning it can be configured to meet every appropriate award and penalty. Some solutions have already factored in the National Employment Standards (NES), for example, and modern industry and occupation awards, and have the flexibility to change when new awards and rules are introduced.
In addition, rules and penalties outside of the norm can be incorporated into payroll to create a tailor-made system.
Bridging into payroll
Forty-eight per cent of attendees at the WFS payroll event agreed the biggest factor to assist with ensuring compliance is automating manual processes.
Another reason beyond mitigating risk is that automation also frees up HR and payroll personnel to use their uniquely human experience and insights to benefit the business.
The EY 2017 Global Payroll survey report, “How Are Companies Preparing for the Payroll of the Future?” cites that repetitive tasks take up 93 per cent of HR and payroll employees’ time.
Eliminating manual processing can free up personnel to focus on process controls, reconciliations and data integrity, or higher order strategic thinking around retention and engagement strategies, for example.
The bottom line is that wage theft brought payroll into the spotlight, and the issue of overpayment of workers is lingering in the shadows – but whichever way the domino falls, misdirected funds is an indicator that the way payroll and compliance is managed, regulated and automated needs more careful consideration.
Where technology exists to reduce the risk and help ensure workers are paid accurately and fairly, and their employers the same – surely it’s worth further investigation.
Payroll efficiencies pay off, for everyone.
Nick Bailey is Senior VP Asia Pacific and Japan for WorkForce Software