How Coronavirus Impacts Payroll
With the global coronavirus pandemic still spreading, payday has taken on new appreciation and importance. Making sure your employees are paid the right amount at the right time has never been more critical.
Business and Payroll Evolution
Companies and business models almost always evolve and progress during and after a recession. But they usually have time to anticipate the recession and prepare for any potential fallout. The COVID-19 pandemic is a true black swan event that has sent companies reeling to find immediate solutions. This will likely fast-track innovation and change for the near future.
With employee welfare as a top priority, many companies are going above and beyond to put their teams at ease during these uncertain times. Rather than simply meeting legal requirements, they are voluntarily adopting measures to lift some of the financial burden and stress from their staff.
Although we don’t know how long the coronavirus will last, we do know it will end at some point. So maintaining a strong employer reputation will help when the crisis concludes. This is a great time for businesses to evaluate payroll policies such as:
- Paid sick leave
- Paid leave to care for relatives
- Support during self-isolation
- Flexibility regarding paid and unpaid time off
- Overtime policies
- Use of contractors
All of these things will need to be considered as we adjust to a new normal (at least for the time being). This will likely have implications for payroll and tax for both the short- and long-term. Learning to adjust and adapt with changing circumstances is critical for businesses during this time.
Understanding the New Laws
Keeping up with the ever-changing emergency legislation can be a real challenge, especially for multinational companies. But understanding these new laws and implementing them is very important. Constant communication and clear processes will be key to improving employee uncertainty as the COVID-19 situation evolves.
Like we mentioned earlier, many of these laws will involve changes specifically to HR and payroll. Here are some recent updates:
- The United Kingdom has already moved to fund statutory sick pay (SSP) in regard to coronavirus for any business with less than 250 employees. In addition to that, the legislation wants to enable SSP to be paid from day one, instead of the typical day four. Businesses will need to make sure to adjust payroll and systems to reflect these changes. Especially considering that many countries may adopt similar policies.
- Payroll tax waivers have passed in Queensland, Western Australia and Tasmania. Deferral time and payroll amounts differ from place to place, so it’s important to stay aware of the changes. Make sure to pay attention to these new rules and changes as they apply to your current payroll systems in each jurisdiction.
Adapting with the Changing Landscape
Communication with your staff is key to overcoming this tumultuous pandemic. Make sure that any new policies are clear and consistent throughout your jurisdictions, but also stay within the constraints of local regulations.
Business workflows and processes need to be updated to manage this crisis. Especially considering the possibility of inadequate staff to handle filing and processing, as well as potential delays to third-party payments. Managing the risks of non-payment or late payroll should be a top priority for your business. As you evaluate your payroll, anticipate delays and flag them clearly and early.
Here are four categories to consider as you prepare to adapt with these changes:
- Conduct a Workflow Analysis: Analyzing your current workflow will help you identify processes that are essential for filing tax obligations and paying employees. Consider the question of whether or not your systems can be accessed remotely while quarantines are in effect.
- Consider Resourcing: Staff schedules may be a bit more unpredictable during the coronavirus outbreak. You’ll need to assess whether or not there are enough back-up staff if key team members become unavailable. In this situation, it’s best to create a broad knowledge base to avoid skills becoming too siloed.
- Keep People Informed: Overcommunicating is better than not communicating enough. Make sure your third parties or partners are made aware of potential delays in payment or processing.
- Stay Connected with Employees: Now, more than ever, your employees need to know they can trust you. Staying on top of the various government policies will support your staff and develop stronger working relationships.
About Global Upside
As your business reacts to the evolving COVID-19 situation, Global Upside is prepared to help support you during these times. We provide comprehensive accounting, HR, payroll, tax, incorporation, and talent acquisition services to help companies grow both domestically and overseas. Our integrated services, delivered via a single point of contact, simplify your day-to-day operations so you can free up time and resources to focus on growth, even during a crisis.