Managing payroll through the coronavirus crisis

Out of all the economic shocks, consumer hysteria is the most lethal. Since the global outbreak of coronavirus (Covid-19), the panic and fear among the public throughout the globe is spreading faster than the virus. Coronavirus is bringing many challenges to businesses around the globe but providing support to employees is a high priority. Top Indian companies are closing ranks to protect their employees in the fight against Covid-19 by introducing special provisions in company policies to assure quarantining staff that their isolation period will not affect their take home salaries. Many governments are moving swiftly to introduce new measures to support the economy and their populations during these difficult circumstances.

Businesses will need to adapt their systems and structures to keep up with the changing legislation. Companies should always prioritise the best interests of their staff wherever possible, and HR and payroll issues should be the focus now. Ensuring people are paid the right amount at the right time is crucial to maintaining trust and motivation of employees and can be a challenge at any time. Now with sharp economic shock, companies of all sizes will come under intense pressure to get it right.

Companies have an obligation to stay on top of emergency legislation as it is announced, and rapidly integrate it into their policies. For multinational companies, this adds another level of complexity. Clear communication and processes are more important than ever and will be key to managing uncertainty among employees and third parties as the situation evolves. From an HR and payroll management system perspective, there will be changes relating to sick pay, overtime, and leave − compassionate leave in particular.

Payroll taxes are another area where countries have been passing legislation to help businesses. For example, in Australia, there have been payroll tax waivers passed in Queensland, Western Australia and Tasmania. Each scheme contains different specifics, such as deferral time and payroll amounts. It is imperative that companies pay close attention to the new rules and apply them to their current payroll systems in each jurisdiction.

Unemployment benefits are another focus of governments around the world as businesses are being shuttered for indeterminate amounts of time. For example, in the Netherlands, companies faced with a loss of turnover can apply for the government scheme ‘Emergency fund bridging employment’ intended to allow companies to pay their employees on permanent and flexible contract. Variations of unemployment benefit schemes are being adopted worldwide. Faced with an astounding amount of changes, companies must focus on maintaining clear communication with staff, including updating handbooks. They must ensure all new policies are consistent across jurisdictions but fall within the limits of local regulations.

There is also a possibility of  the lack of adequate staff to deal with filing and processing, as well as delays to third-party payments. Workflows and processes will need to be adapted in anticipation of this. Payroll administration services need to to make sure that, Mitigating the risks of late payroll or non-payment needs to be a priority. If any delays are expected to payroll, employee payroll management system needs to be flag this clearly and early.