Each year, governments around the world make changes to payroll and employment laws and regulations. Some changes impact payroll more significantly than others, but all new changes each year must be identified and appropriately managed to ensure compliance. If you are paying employees overseas, you must ensure your payroll stays ahead of the regulations so you aren’t stuck with penalties or fines. Here are a few current and upcoming changes that could affect your payroll processing around the world.
United Kingdom
Auto-enrollment is changing in the UK beginning April 6th of this year. The contribution minimums for employers is increasing to 2% (vs. 1% previously) and employees must also contribute a higher percentage as well (up to 3% vs. 2% previously). The contribution minimums will change again in April 2019, so payroll must be adjusted to reflect the new minimums and ensure compliance
European Union
The General Data Protection Regulation (GDPR) changes in the EU are the most significant changes to data privacy in the last 20 years. Companies must prepare for the May 25th deadline or face outrageous penalties ($20M or more depending on the infraction). The changes affect any company that processes or stores personal data of EU citizens regardless of the location of the company or its headquarters. The GDPR changes also affect how companies communicate with their prospects and clients, as well as how companies will distribute payslips. Make sure you are prepared for the changes as the consequences are extremely strict.
Australia
The before tax contribution cap to the superannuation (similar to social security in the US) has been cut for the 2017/2018 year. The general contribution caps have dropped to $25,000 for all ages (previously $30K for under 49 years, $35K for over 49 years). Penalty rates have also been cut for specific industries. The penalty rate is a minimum rate of pay that is higher than the usual minimum wage paid to employees who work night shifts, overtime, and weekends. This change significantly affects companies with part or full time workers in the retail, hospitality, and pharmaceutical industries and the rate changes are different for each based on full or part time status.
India
India is proposing significant changes to labor laws, including changes to codes used to address wages, social security, welfare, and safety regulations. Many outdated labor laws are being updated to make more sense in today’s market, like allowing women to work beyond the hours of 7:00am – 9:30pm, permitting online business registration and return filing, and agreeing to individual establishments like malls and shopping complexes to have separate opening and closing hours. Stay updated with upcoming changes to ensure payroll compliance.
If you are managing a business overseas, compliance is a vital success factor. If you are struggling to keep up with regulatory changes, or would like to improve operations, we can help! Visit www.bluemarblepayroll.com/solutions to get started.