Managing payroll in a traditional work setup is difficult enough for an HR personnel, but how does it change when a team goes remote? A lot of new factors come into consideration: standard pay rate per country, culture, time difference, and the legal system in different countries to name a few.
But what are the common payroll headaches you are most likely to face as you explore outsourcing your employees? If you are planning or already managing remote employees for your company, this article will help you as we list the 5 common remote payroll headaches that you might encounter and how you can simplify this through Employer of Record (EOR) services.
Many people believe that remote work setup started due to the pandemic but this is not entirely true. While telecommuting started in the 1950s, the work-from-home trend officially rose as early as 2000-2010. But, with the pandemic, it has become more popular and in most cases necessary, leaving HR managers forced to embrace this change from their typical office-based work.
Although this is mutually beneficial for employers and employees, most HR managers find this sudden shift problematic. This is because of the need to transition and adapt quickly to the situation without enough preparation, training, or systems in place especially when it comes to payroll. They also don’t have enough knowledge about the distinct challenges that they must overcome.
Because of this, companies must be prepared for the potential pitfalls of these operational changes and plan things accordingly. If their plan goes as far as employing talents overseas, it is important to have a risk assessment for their international payroll solutions.
To ensure productivity in a remote work environment, companies need to invest in an international payroll solution that will accurately track their employees’ time in and out of work. However, not all systems are perfect and if you happen to use an outdated or faulty system, it may cause an array of problems like late payments, miscalculation or untruthful recording of time worked.
A survey from Kronos stated that 29% of their respondents use payroll solutions more than 10 years old. This means that most of the payroll software companies use may not be a great fit for the needs of a remote work setup. On top of that, most of these old systems have no way of tracking overtime and undertime remotely causing serious payroll headaches for HR employees.
On the other hand, some of the new time-tracking systems that are available online are more expensive and are more restrictive and invasive which causes discomfort to its users. They track a person’s activity in a device based on the frequency of typing and moving the mouse. Most of them also take screenshots which is not appropriate for sensitive tasks that need privacy.
In response to this, Remotify has integrated a reliable payroll system in its services that will help employers and HR managers immensely. It tracks an employee’s time in and out without being overly invasive and restrictive. It also introduces effective time dispute reporting, overtime requests, and leave proposals that solve miscommunication.
A “work anytime, anywhere” isn’t always advantageous especially for the HR department who needs to understand the differences in rules, pay, and regulations of various places. This includes the minimum wages, tax requirements, and labor standards which is almost impossible for an HR manager to master overnight.
And while studying different labor standards and tax requirements is complicated enough, there is also an ongoing debate about the adequate salary offer for employees living in different places, Some think that it is only right for the employees to have various wages depending on their average living costs. Meanwhile, some people think that a company should offer the same salary for a similar role regardless of geographical location.
In the end, your decision should still boil down to the rules and regulations of the country your employee is living in. If this is too complicated for you, it is best to rely on third-party services like Employer of Record companies who can handle the payroll system and tax payments for you.
For HR employees, it is crucial to know the employee’s paid time off and holidays to ensure that there will be no mixup in the payroll. Because sick leaves are unforeseen, it may push off the payroll process which may lead to late paychecks.
Moreover, a remote setup means having different holidays. In these cases, HR managers must note all of this in advance and have a monthly calendar that shows the upcoming paid and unpaid holidays.
But, to make things easier for you, our Employer of Record services includes local payroll management. We will also be sending you a monthly calendar with a breakdown of payroll dates and paid and unpaid holidays.
Saying that HR managers only have one job is not true at all. They have a lot of things on their plate including talent management and acquisition, providing onboarding and training, and creating retention strategies. However, among all these complicated tasks, payroll management is the most important thing that they cannot push aside.
However, there are a lot of possible causes of late paychecks such as outstanding invoices from your company’s clients or payroll mistakes that need to be addressed. If you think that the payment will be late, it is important to relay this information to your employees as soon as possible.
There are a lot of things to factor in when managing a local payroll system for remote employers. Due to the sudden shift from a traditional setup, it is difficult for HR managers and employees ls to learn about how things should work all at once. They also need to study the rules and regulations of other countries which are complicated and time-consuming.
To make payroll management a lot easier, we offer services to help founders, business owners and HR managers to do the needful in payroll such as setting pay expectations, filing your employee's tax requirements, social contributions and following the labor standards in the Philippines. With our services, your remote team will have an organized timekeeping and payroll system ensuring that they will be paid right, and on time, all the time. Learn more about our services and set up a call with us to get started.
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