Canadian HR Reporter

CANADIAN HR REPORTER JANUARY 2018 16 FEATURES Navigating Benefits During the Notice Period Is your organization aware of its legal obligations on benefits to departing employees? PRESENTER Lisa Stam Spring Law Topics will include employee benefits and: Onboarding Employees: • Reduce mental health problems among employees • Benefit plans and the ESA and Human Rights Code • Benefit plans and the employment contract Offboarding Employees: • Transitioning to retirement • Transitioning to LTD • Terminating employment DATE: January 24, 2018 TIME: Noon - 1:00 p.m. ET REGISTER: www.cpdcentre.ca/hrreporter WEBINAR SERIES LOOKING FOR A SUPPLIER OR VENDOR? Visit hrreporter.com/hr-vendors-guide PAYROLL Payroll more complex than it might seem Global ranking highlights challenges of compliance, data protection By Anne Clifford P ayroll is no longer just about paying people, it's about managing data — the handling, control and se- curity of data in an ever more complex tax and legal landscape. is was the overriding fi nding of the 2017 Global Payroll Com- plexity Index (GPCI), an inde- pendent study published by NGA Human Resources in October that ranks nearly 50 countries and re- gions on their payroll complexity levels. Traditional ways of managing payroll processes are being chal- lenged faster than ever. is ac- celeration is due to advances in technology, more complex legisla- tion and data privacy regulations, developments in benefi ts and re- wards, and changes in workforce structures. Canada landed mid-table, but this is not to suggest its payroll is any less challenging. Many of the risks and challenges can be off set so the ranking does not necessar- ily align with the assumption of simplifi cation. In countries where the 2017 Global Payroll Complexity In- dex reports a fall in complexity — the United States and Canada notably — this is not because the challenge is any less, it's because the high-risk, high-admin payroll processes have been outsourced or automated to reduce the risk of fi nes and reputation damage. "When factoring in the added challenges of two official lan- guages, the multifaceted legisla- tive requirements and disparate governing bodies of Quebec, and the multijurisdictional chal- lenges placed upon practitioners who operate in this province and others, the complexity of Cana- dian payroll remains exception- ally high," says Steven van Alstine, president and CEO of the Cana- dian Payroll Association (CPA), which partnered in the study. e rise in compliance A significant change since the GPCI was last published in 2014 is the amount of data in modern payroll processes, and the leg- islations that monitor and con- trol this in each country. No two countries have the same rules or reporting schedules so multi- country payroll models have multi-compliance challenges, adding multi-country complexity to already complex processes. Payroll professionals are re- sponsible for managing and secur- ing this data. And the compliance stakes are only getting greater. Are they really qualifi ed to do this? Non-compliance in Canada and North America is taken seri- ously by the authorities. Increas- ingly, there are no second chanc- es. Failure to comply or a data breach carries far more than stiff fi nes. e damage to a brand and business reputation can be — and has been — a killer for many busi- nesses around the world. It's no surprise then that a poll of Canadian payroll profession- als during a GPCI webinar found payroll, HR and regulatory up- dates are their greatest challenge, securing over 65 per cent of votes. Zero tolerance on payroll non- compliance and the competitive emergence of new business econo- mies means, without a doubt, busi- nesses must have robust payroll. Is payroll more complex? Complexity remains high or very high for Canadian payroll teams when it comes to managing pay- roll data and the payroll calcula- tion process. Much of the work the CPA is doing is to work with the Canadian government to make payroll processes as effi cient and eff ective as possible. e objective is to make legislative reporting ef- fi cient and consolidated. ere is work being done with Service Canada, too, around re- cord of employment (ROE) ad- ministration. Again, the discus- sion is to streamline the informa- tion provided to the government, and how it can be used by other departments. e overall objec- tive is to lessen complexity. e Canadian government is supportive of the payroll com- munity. Over the last few years, it has run many initiatives to re- duce the paper and administra- tive burden, and these seem to be helping. Another positive is that, from an administration perspec- tive, the Canada Revenue Agency is the main remittance gatekeeper when it comes to core statutory withholdings. " is is a double-edged sword," says Van Alstine. " e fact that effi ciency and eff ectiveness is a mantra we preach and work with government on at both a federal, provincial and territorial level, it is counterbalanced by issues around complexity, like Quebec payrolls and organizations operating with- in multiple jurisdictions." Quebec was not included in the 2017 GPCI, but will be in the next study, pre-empting an expected increase in complexity. Issues on the horizon So, what will aff ect next-genera- tion payroll? e global economy: Many com- panies are expanding internation- ally and this means recruiting and paying people in new countries. is adds complexity where pre- viously payroll departments were running only local payrolls. Big data and analytics: Big data and analytics are the new or- ganizational gold. Payroll special- ists are the bedrock of HR data. They not only have workforce data, they have up-to-date data, compliance data, time-needs data, and complete, real-time data. Pay- roll is becoming the best enabler for analytics — not only internally, but for regulators as well. Global regulations and con- trols: Organizations are now being regulated at a global level. ese global regulations are being im- posed by multiple regulatory bod- ies across the globe. It's similar to the Sarbanes-Oxley regulation in the U.S., which set a precedent and spawned the Japanese SMJ equiv- alent, for example, so again we're seeing the emergence of global regulations for HR data that will aff ect payroll in the local market. Global view of business: As mentioned earlier, payroll is the bedrock of data, so as businesses grow and expand into new re- gions, the decision-makers are coming to payroll to get that global data and global view. Compliance: is is going to become more stringent at the global and local levels, and is be- ing enforced with payroll depart- ments through audits with exter- nal bodies coming in and fi ne- tooth-combing organizations. Protection of personal infor- mation: We're in a world where everything is electronic. Cyber- crimes are increasing; we're seeing breaches and hackers wanting to get in as they realize the power of data. Going forward, payroll needs to be even more diligent in the pro- tection of personal employee data. Anne Clifford is senior director of global payroll operations at NGA Human Resources . For more informa- tion on the study, visit my.ngahr.com/ payrollcomplexity-2017. Summary fi ndings for Canada • Canada sits at 31st in complexity ranking and remains in the bottom 40 per cent. • 65 per cent report managing technical and HR updates as the greatest challenge. • 25 per cent highlight the challenge of regulatory reporting and data analytics. • 63 per cent manage payroll in two or more jurisdictions. • Canada has the challenges of two governing bodies and two offi cial languages.

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