2018 saw big changes across the digital landscape, particularly surrounding data privacy. One of the biggest scandals to hit in 2018 was the Facebook Cambridge Analytica scandal, which broke in March 2018 shocked the world.
Around the same time, the European Union launched the General Data Protection Regulation, which has been viewed as one of the biggest changes to data protection rules in the last two decades.
GDPR is a regulation that requires businesses to protect the personal data and privacy of EU citizens for transactions that occur within EU member states. Read more on GDPR here.
The new changes had a ripple effect across the globe and significantly altered how HR and Payroll handle employee information.
Is GDPR relevant to your business?
Australian businesses fall under GDPR if they ‘control’ or ‘process’ personal data of EU individuals, such as employees. This also includes;
Australian entities that operate businesses that are established in a member state of the EU
Australian-based entities that offer goods or services to individuals in the EU, irrespective of whether a payment is required
Australian-based entities that monitor the behaviour of individuals in the EU, where that behaviour takes place within the EU.
2018 also saw the rollout of Single Touch Payroll and a big push towards digitalised, paperless payroll processes across the globe.
And lastly, the gig economy boomed in 2018, with the rise of on-demand work and flexible work and pay agreements. Of course, there were sham contracting scandals that preyed on the gig economy, and many well-known companies have been in the press for the wrong reasons. The gig-economy is only set to go one way, and in 2019 and beyond it’s sure to become more normalised.
So what will 2019 and beyond look like;
As more and more technology becomes commonplace in our day to day lives, the opportunities to streamline and optimise payroll functions get bigger. It’s now more important than ever for payroll professionals to keep their finger on the pulse with tech trends.
Traditional pay cycles are changing
As the gig economy grows in stature, on-demand work will become the norm, and as such workers will start to expect pay cycles to follow similar trends. Traditional pay cycles are becoming restrictive for a transient workforce who are calling for ‘same-day pay’ – where they are paid immediately upon the execution of their output or hours worked.
2019 will introduce improvements in processing speeds and data collection from employers (such as smart devices to determine when workers are on site).
Chatbots and A.I.
We’re all by now familiar chat bots while shopping online or needing post-purchase support, and 2019 is set to see an increase in Chatbots to process simple queries in a time efficient manner. Companies treating their employees as customers and offering the same high-quality customer service is an important philosophy to implement, and by decreasing response time and human-time spent answering run of the mill queries, this is a win-win for both employees & employers. Remember, employees are a company’s biggest asset.
Looking beyond 2019, AI could well learn and perform complex functions, however, in, 2019, AI is likely to be restricted to chatbot functionality.
Open banking set to bring new efficiencies to payroll
Open banking is set to shake up the way we bank and opens up new opportunities for businesses. It is based on an open API ecosystem that will help create next-generation value propositions. This concept has already taken hold in the U.K., and Asia are starting to adopt the scheme as well.
What open banking will enable is payments to be made outside of the traditional banking platforms, such as making payments through your payroll software provider. This means eliminating the need to take payment information from one place and moving it into banking systems, streamlining the entire payment process.
It also brings a whole host of other benefits, such as reduced international payment rates, improved control over payroll workflows and holding balances in multiple currencies.
In 2019, expect open banking to not only become prevalent in the consumer space but to also be gradually adopted by businesses.
Single Touch Payroll (STP) will be the single biggest taxation compliance change facing Australian businesses since the introduction of the GST.
In July 2018 the ATO introduced STP for businesses employing 20 or more workers and the obligation will extend to employers of less than 20 staff from July 2019.
STP will require all business owners to report salaries and wages, pay as you go (PAYG) withholding, allowances, deductions and superannuation contributions to the ATO each time they pay employees.
The STP process will be made even simpler to administer if businesses review their systems and processes and aim to get three key factors right.
The first is the use of robust legal and accounting structures. This includes a good understanding of the type of employees they have, based on ATO legislation, such as contractors, casuals or part-timers.
It is important to know what Awards the workers fall under and to make sure employment contracts are up to date.
Secondly, the switch to direct ATO reporting will be far more efficient if the right software is in place to manage the process. This means being STP-compliant, will be a positive spin-off if there is also an integrated and connected system between the pay office and professional partners, such as accountants and/or financiers.
Then, focus on streamlining by having efficient employee management, including human resource planning.
A wide range of resource is available to help businesses get set for STP.
For tax and company structural advice, we advise businesses to speak to their accountant.
During 2018 the Fair Work Ombudsman fined a record number of Australian business who either unknowingly or knowingly processed their payroll incorrectly with underpayment, of hourly rates and failure to meet payslip requirements topping the none-compliance list. Without a doubt, the veritable quagmire of legislation and regulation in Australia is a contributing factor. The result is one of financial and reputation damage which for many Business Executives and Owners is an overwhelmingly painful thought.
Today more and more businesses are seeking outside help and support for not only their payroll processing needs but support with compliance, data accuracy, insightful data analytics and knowledgeable talent. If you are considering having your payroll managed or supported by a 3rd party, here are seven key questions to ask when researching options.
Do they employ high-quality payroll talent?
The light continues to shine brightly on digitalisation and innovative technologies that will automate and augment roles, task and responsibilities. As we know from sports like Formula One the very best technology is brought to life by highly talented, skilled and suitably qualified humans. An average driver will produce average results, and it’s exactly the same in the world of payroll. Ensure you create the opportunity to get up close and personal with their payroll talent, understand their background, qualifications, continuous development program, ability to think creatively and the ability to provide data insights. Remember Sales and Marketing do not process Payrolls.
What aspects of payroll do you want to outsource?
You need to be totally clear on what aspects of the payroll eco-system you wish to outsource. Do you simply want to outsource the management of data entry? Or do you want to completely remove all aspects of payroll management from your organisation, including responsibility for payroll compliance? Clearly understand what aspects of payroll you will retain responsibility for. And remember the more you are responsible for the lower the service cost.
What does the customer experience feel like?
The Customer Experience from an Employer and Employee perspective will be critical to overall service satisfaction. Make sure you understand the end-to-end Customer experience and you are presented with the opportunity to meet your key points of contact. Key points of contact should include, implementation lead, payroll manager and key escalation point. It’s also worth looking for a company that provides Single-Point-of-Contact Support. Save yourself time and hassle with dedicated support who knows your story rather than starting from the beginning with someone new every time you reach out.
Potential business partners will be forthcoming with contact details for happy Customers, which is great. It is however very important to do your own research and identify business professionals in your network that have experiences interacting with business partners you may be considering. It is also worth looking for instances were a Customer has experienced issues with the service provided and how their business partner worked to deliver a solution. Truly great partners are the ones that will proactively and transparently solve your problems.
Is their technology in step with current trends?
Technology is always changing, and you need a payroll provider who is on top of the latest trends. You need to look into how user-friendly their software is. Cloud-based options make it easy for you and your employees and management to interact with payroll data and processes via mobile devices. With technology front-end’s, such as self-service portals, make sure you allow key business stakeholders the opportunity to interact with the software, this ensures buy-in which will increase employee engagement and take up during the implementation phase.
How safe will my business’ and my employees’ information be?
Sharing sensitive data with a business partner can be scary. Breaches and crashes have been in the news more often so it’s imperative you look into how your data is stored. Look for a company who can provide round-the-clock security and has a comprehensive disaster recovery system in place.
Who is responsible for payroll compliance and data accuracy?
Australian payroll is complex and staying on top of legislation and regulation requires regular data and compliance audits. Will the provider take responsibility for ensuring your payroll is processed in accordance with Australian workplace law? Or are you responsible for retaining payroll knowledge in-house that ensures your payroll remains compliant?
As you can see there is a lot to consider when choosing to outsource your payroll. Taking the time to research providers and asking the right questions will ensure you wind up with a company you are happy with who meets all your needs and allows you to be free of payroll.
About Payroll HQ
Payroll HQ is an Australian owned and operated managed payroll practice. The Payroll HQ service offering allows businesses to be completely free of payroll.
In everyday life, automation surrounds us and simplifies tasks, much to the benefit of all of us.
However, in the workplace there is a fear that a major portion of human jobs will be eradicated by technologies such as robotic process automation (RPA) and Artificial Intelligence (AI). As management consultancy McKinsey says: “Forty-five per cent of the activities individuals are paid to perform can be automated by adapting currently demonstrated technologies.”
But amazingly, there is an upside. As organisations automate in an attempt to cut costs and reduce the chance of manual errors, it means payroll practitioners can spend less time on data entry and other repetitive work.
They are being offered the chance to move from working in an essential admin function to becoming strategic partners of the business by delivering essential insights and value instead. By using automation effectively, professionals can free up their time to operate at a more strategic level.
Why is automation a concern for payroll professionals?
According to the study ‘The Workforce View in Europe 2018’ research, almost a third (30%) of workers are worried that their job will be automated out at some point in the future. Interestingly, younger generations are more concerned about this scenario than their older counterparts – 41% of 16-24-year-olds fear their job will disappear at some point in the future compared to just 20% of workers over 55.
This situation begs the question of what organisations are currently doing to allay these fears. Worryingly, some 48% of European employees feel their employers are failing to make the necessary preparations to retrain and upskill them in response to the rise in automation.
What will the payroll professional of the future look like?
While some manual payroll tasks such as calculating tax are currently being automated, there are clearly areas in which human intuition and problem-solving will remain vital such as interpreting regulatory changes or dealing with exceptions. AI and robots cannot liaise with stakeholders, but payroll professionals with inside knowledge of systems and processes can. Humans will also be required to take charge of monitoring and directing AI systems too.
The biggest plus of automation is that it frees up professionals’ time to focus on more strategic concerns such as business forecasting, establishing employee return on investment and influencing board-level decisions. As RPA technology becomes more widespread, the need for data scientists to analyse the patterns and trends hidden in payroll information will increase. Humans will also play a central role in governance and monitoring terms.
Three Square Market, a software developer in the States, recently microchipped their workforce (voluntarily) to perform everyday tasks such as use the printers and unlock doors. You can read about it on another blog we wrote here;
The best way to prepare yourself for the future is to upskill and reskill. Versatility will be key. As data plays an increasingly important role in the function, payroll professionals will need to understand this data inside out. They will require deeper industry knowledge, an ability to solve problems creatively as well as effective data analysis and people skills.
While appropriate training will be crucial, it may also be necessary to recruit from a wider talent pool than has been the case in the past.
Payroll HQ held a webinar which examines the radically shifting digital wave of new technologies that are impacting how we work, the skills we need and what Payroll, HR and Finance Professionals can proactively do to ensure they stay connected to a new economy of jobs. You can watch a recording of this webinar here.
How Payroll HQ can help with build your future?
Payroll HQ are already equipped to provide many leading technology offerings to our customers all over Australia, saving them valuable hours each week by streamlining the payroll function. From employee self-setup, paperless timesheets, real-time insight and trend reporting and face recognition clock ins, we have the solution you need. Let us be your Payroll HQ so that you can concentrate on the important stuff. Contact us for more information.
Flexible work arrangements are often seen as a valuable work-perk by employees. With the rise of mobile connectivity and co-sharing workspaces, the modern workplace is changing.
As of 1 December 2018, new rules have been included in all modern awards relating to requests for flexible work arrangements.
Fairwork advises “Before responding to a request from an eligible employee, an employer must first discuss the request with the employee to try to reach an agreement about a change to their working arrangements.
Requests can only be refused on reasonable business grounds. If employers refuse a request, they need to provide the employee with a written response.”
Payroll HQ offers comprehensive reporting available to clients, enabling easier employee discussions based on actual data, such as detailed analytics around leave liability, gender pay gap analysis, terminations, new hires, headcount by employee type and location.
What are flexible work arrangements?
Flexible work arrangements can include changes to the location of work (such as working from home); patterns of work; or hours of work (such as a change to start & finish times).
So, who’s eligible for flexible work arrangements?
Employees who meet one of the following criteria and have worked for the same employer for 12 months are eligible to request flexible work arrangements;
Are a parent or carer of a child who is school-aged or younger
Have a disability
Are 55 or older
Are experiencing (or providing care or support to a victim of) family or domestic violence.
Casual employees are eligible if they’ve regularly and systematically worked for the same employee for 12 months or more and there’s a reasonable expectation of continuing work with the employer on a regular and systematic basis.
How do employees submit a request?
The request has to be in writing and thoroughly explain the changes requested and the reasons why.
What should employers do with a request?
Employers covered by an award must first discuss the request with their employee to try to reach an agreement about changes to the employee’s working conditions.
All employers who receive a request must provide a written response within 21 days which outlines whether the request is approved or refused.
Employers must take into consideration;
The needs of the employee
Consequences for the employee if changes in working arrangements aren’t made
Employers can only refuse a request on reasonable business grounds. If a request is refused the written response must include the reasons for the refusal.
Reasonable business grounds can include:
The requested arrangements are too costly
Other employees’ working arrangements can’t be changed to accommodate the request
It’s impractical to change other employees’ working arrangements or hire new employees to accommodate the request
The request would result in a significant loss of productivity or have a significant negative impact on customer service.
Awards contain specific information on what needs to be included in the written response if the request is refused or if a different change in working arrangements is agreed.
Compliance, or slipping into non-compliance, is one of the biggest headaches payroll teams across the country face. By choosing a managed payroll service like Payroll HQ, we take away the pain and deliver a quality service with confidence, trust and transparency.
Are you clear on the circumstances where a payroll service provider must be a registered tax practitioner? These include Payroll Service Providers who deliver payroll outsourcing services in Australia.
Part of being a registered tax agent means doing the following for your clients;
A client outsources their entire payroll and accounts work to a payroll service provider.
A payroll service provider offers a help desk which provides customised advice to assist their client to meet a specific tax outcome.
A payroll service provider offers tax-related advice to their client that is specific to the client’s circumstances.
A payroll service provider prepares and/or lodges documents with the ATO on behalf of their client.
A payroll service provider deals with the Commissioner on behalf of their client.
The Tax Practitioners Board have put together a 10-page document detailing all the criteria, which you can view here.
If you’re interested in finding out how Payroll HQ, a registered tax agent, can help your company, then get in touch.
Payroll HQ have been able to help their clients grow their businesses by removing uncertainty that can surround payroll, allowing focus and attention to be spent on your core business.
Earlier this year, the Australian Payroll Association surveyed over 400 payroll professionals nationwide across a range of industries, focussing on the process and end user experience of payroll outsourcing. For payroll outsourcing providers, the results weren’t flattering. In this blog, I’ll share the key findings and discuss the case both for and against payroll outsourcing.
In-House or Outsourced?
Survey Finding: 71% of Australian businesses run payroll in-house.
The survey revealed that most Australian businesses process payroll in-house. In doing so, they assume full accountability and responsibility for the payroll operation including governance and controls, as well as additionally managing the payroll function in accordance with State and Territory legislation.
The Driving Factors Behind Outsourcing?
Survey Finding: 55% of businesses stated they choose to outsource because they wanted to lower the cost of payroll processing.
The research illustrates that for those who do outsource, on the whole, it’s about saving money. I find this both a little strange and concerning. The last time I swapped my internet provider for an advertised cheaper option, guess what happened? The service level was of course of far poorer quality and the service less reliable. Other leading factors behind organisations choosing to outsource that emerged in the survey were to try and ensure a high level of payroll compliance, and testing whether there was a requirement to retain payroll expertise in-house.
Would You Still Outsource?
Survey Finding: 58% of businesses surveyed who had outsourced their payroll would not make the same decision to do so again based on their current experience.
This question is always pivotal as a barometer into the experience of clients who outsource their payroll. That is, given what you know now, and the experiences you have had, would you still outsource your payroll function if given the opportunity to choose again? The outcome of this question is quite alarming, especially if you are a payroll outsourcing provider. Based on current experience, the majority of businesses that had outsourced their payroll function would not choose to do so again.
Survey Finding: 62% of businesses surveyed indicated they were spending too much time on payroll.
It would appear that payroll outsourcing is not really payroll outsourcing. And what do I mean by that? Well, the biggest issue faced by businesses who outsourced their payroll function was that they still felt they were spending far too much time and money on payroll related matters. Furthermore, the quality of the outsourcing service was also rated as poor – with payroll outsource providers making too many mistakes, coupled with poor customer service.
…So, what’s next?
The key results from the survey indicate that payroll outsourcing providers in Australia have work to do – especially when it comes to providing an acceptable level of quality service to their customers.
Unfortunately, many executives view payroll as a “non-core” business function and would love to see their payroll outsourced, subsequently allowing them to focus and invest more time in their core business. However, they are scared to do so because of findings such as these. One of the things I’ve noticed about payroll outsourcing services is that providers of these services are not currently delivering clarity to potential customers as to exactly what it is that they will be responsible for in the outsourced payroll function. In digesting the survey results, as well as through the anecdotal evidence and feedback I get when I speak with those who have or are considering outsourcing their payroll, I feel that payroll outsourcing providers are in a cycle of over-promising and under delivering. Much like my internet provider!
From an evaluation perspective, I would ask buyers – especially procurement officers – to forget putting saving money as their number one goal when they look to outsource payroll. Australian payroll is complex, making compliance difficult to achieve year on year, especially without fully trained and qualified payroll professionals managing your payroll.
Therefore, when considering outsourcing payroll, buyers should ensure the providers they review employ fully trained payroll consultants – qualified to at least Certificate IV in Payroll Administration. Additionally, any potential outsourcing provider should be offering your business payroll advice and guidance relating to the impact that legislative changes will potentially create as they happen.
Considering notions of quality and expertise, it’s critical for buyers to see past the “price per payslip.” Don’t let procurement take you there. The price per payslip does not tell the whole story – so buyers should make sure they are very clear what the price includes and excludes, and what responsibility, if any, they will retain in-house.
If your business is looking to outsource the full end-to-end management of payroll and have no payroll expertise in-house, then this is exactly what you should request. I’ve seen too many organisations who assume that they’re outsourcing the entire payroll function, including direct employee support when it hasn’t been specified, and ultimately, therefore, not been delivered.
Finally, be informed about who you are buying the service from. Are they a technology company who develop brilliant HR & Payroll technology with outsourcing shoehorned as a sideline offering? Or are they are they experts in delivering high-quality payroll outsourcing services? This will have a significant impact on the quality of service you will enjoy or endure.
Don’t forget to download our free eBook on how to make outsourcing work for you. Co-written by Andre Atton, General Manager of Payroll HQ, and Tracy Angwin, CEO of the Australian Payroll Association, this book acts as a blueprint for how to best make payroll outsourcing work for you and your business, and ensure you implement a quality managed payroll service.
On Friday, a panel from the Fair Work Commission announced their decision on the 2017/2018 Annual Wage Review.
After much deliberation and consultation with numerous organisations, the FWC increased the national minimum wage by 3.5%, benefitting approximately 2.3 million employees in the Australian economy. Although the increase is less than the recommendation from the Australian Council of Trade Unions, this is the largest handed down by the Fair Work Commission so as to not discourage employment growth. In the past decade, minimum wages have risen in total by 5.8%.
The 3.5% increase will increase the minimum adult rate to $18.93 per hour, or $719.20 per week based on 38-hour full-time employment, constituting an increase of $24.30 per week.
What does this mean for employers?
All minimum wage rates in Modern Awards will increase by 3.5%, with updated pay guides to be released before the beginning of July.
Employee’s whose pay is determined by a collective agreement may also need their pay rates reviewed to ensure that this is in line with the minimum wage in accordance with the National Employment Standards (NES).
As these pay changes will be effective in the first full pay period beginning or after the 1st of July 2018, employers must ensure pay rates are updated.
How can Payroll HQ help?
Clients of Payroll HQ are in safe hands and will enjoy a hassle-free End of Year period, as our fully qualified and experienced staff manage all End of Year processes, allowing you to focus on what you do best.
To find out more about the Payroll HQ difference, please contact us.
Have you read In Safe Hands yet?
Download your free eBook In Safe Hands, co-written by Andre Atton, General Manager of Payroll HQ, and Tracy Angwin, CEO of the Australian Payroll Association. Acting as a blueprint for transitioning to a managed payroll service, In Safe Hands offers technical tips, as well as the strategic benefits and how to make outsourcing work for you.