Charles Courquin is the director of Symatrix
It is not uncommon for new administrations, following a general elections, to review their tax policies and employment laws and possibly adjust them. In order to meet the current fiscal challenges, the new UK Government made sweeping changes in taxation, pay and pensions. Employers will be required to pay higher National Insurance (NI), covering a larger number of their employees, and the minimum wage will increase in April.
We’ve seen significant changes in employment law made by the UK Government before, both during the campaign and after the election. The Paternity Leave Act (Bereavement Act) extends paternity rights to bereaved fathers and partners, and the Code of Practice on Dismissal and Re-engagement increases consultation requirements when employers want to change employment terms.
Employment Rights Bill includes 28 reforms to employment, including zero-hour contracts and fire-and rehire. The bill grants rights to paternity leave, parental and bereavement leaves, protects against unfair dismissal and strengthens sick pay laws by eliminating the lower earning limit and waiting period.
These changes will have a major impact on payroll and HR. Teams and systems must be agile to adapt. Businesses that fail to adapt can face increased administrative costs, compliance risks and costly mistakes. It also provides organisations with a great opportunity to review, optimise and ensure compliance in payroll and HR processes. What are the steps that companies should take?
The importance for preparation
It is time for companies to review their existing HR and payroll systems to make sure they are still fit for purpose. Assessing the ease of applying new tax codes, how well the system handles changes to employer contributions and statutory wage rates, as well as confirming robust reporting mechanisms, are all important parts of any assessment.
In a world where staff protection is strengthened and costs for hiring and salaries are increasing, it’s important to have tighter controls for managers and higher expectations during the recruitment process and probation period. This will ensure that the right people get hired and are the best fit for the job. The probation period may need to be increased, and job descriptions altered to reflect the tighter processes.
Communication strategies are needed to inform current employees of any changes in their benefits or pay. Employers may have to prepare new recruits and existing employees for lower salaries as employer NI contributions increase. Scenario planning can be useful for anticipating legislative outcomes beyond the immediate future. It involves running simulations in order to understand the financial impact of various scenarios.
Unified HR and Payroll Systems: What are the benefits?
In order to implement these policies and strategies, the HR and payroll team needs to have the right tools and processes. To prepare for regulatory changes, a unified system of HR and payroll is essential. Data integration in real-time ensures all relevant information is updated throughout the organization, including tax codes and employee classifications. This reduces the risk of discrepancies. It is important to avoid costly mistakes. Automatic updates and integrated reporting help businesses meet their obligations without requiring extensive manual intervention.
Comprehensive insights can help you make informed decisions when it comes to responding to new regulations. Unified systems, for example, can empower managers to effectively conduct probation activities. Data stored can be used to inform recruitment managers about their effectiveness, and help them develop effective training strategies. This allows businesses to align their payroll and HR strategies with their financial goals.
Businesses can benefit from working with experts in payroll and HR systems, given the complexity of changes to come. These providers have valuable experience in implementing change across different industries. They ensure that new regulations are seamlessly integrated into existing systems and minimise disruption to the business. Support can be provided to help businesses keep up with the ever-changing payroll and tax regulations.
Building an advantage
The recent changes in employment law present UK businesses with significant challenges and responsibilities, which require immediate attention from the HR and payroll departments. Companies can create a solid foundation for meeting these new regulatory requirements by reviewing and upgrading their existing systems. Unified payroll and HR systems are crucial to achieving compliance, as they allow real-time updates while reducing errors. Partnering with payroll and HR specialists can help streamline this transition. Businesses can take steps to minimize disruptions and keep their operations on track. By addressing gaps and improving efficiency, short-term efforts in business process and capacity can provide immediate value. Organisations that are flexible and prepared will be the best placed to achieve sustainable compliance.
The original version of this article, Employee Law Reform: What it means to HR and payroll, appeared first on Human Resources News.
