Global Payroll Newsletter – April 2022

The April 2022 Blue Marble newsletter discusses solutions to global payroll challenges, changes to labor regulations in India, and expansion and technology challenges.

Solutions for Global Payroll Challenges

Global payroll is complicated – there’s no denying it. Every country has unique regulations, statutory benefits, languages, time zones – the list goes on. With so many factors to consider and so many things that can go wrong, most companies struggle with finding a global payroll process that isn’t stressful or challenging. If you are just starting to unravel the challenges or have already figured out what the problems are in your process, here are some factors to consider and solutions to fix what’s not working.

The first step is determining the biggest challenges for your organization. Have you acquired new companies or started a business in a new country? Does your team have too many manual processes or lack of visibility and data? Looking at your global payroll holistically instead of breaking it into parts is the best way to start solving global payroll challenges.

If your global payroll issues stem from acquiring new businesses or starting operations in a new country, it’s most likely due to using different vendors, systems, and processes in each country. Data is scattered and visibility is not good – sound familiar? Using different systems and vendors makes payroll more complicated because teams often have to use spreadsheets and email to pass data back and forth to in-country providers, there is no aggregated reporting across countries, and communication issues arise with vendors in different time zones. You can’t manage payroll across multiple countries if you can’t view data in real-time and have access to customized, aggregated reporting.

If your global payroll process is divided by country or by business entity, it’s time to look at your process as a whole. The gaps in data or technology will only grow over time – especially as countries make changes each year to payroll regulations. You need a single platform to manage US and global payroll in one place, with aggregated reporting that is customized for your business. It also helps to have a US-based service team that can help in your time zone. When problems come up, you can’t wait weeks to get an answer – you need technology and service working to ensure compliance in every country.

Blue Marble has simplified global payroll and operations with a holistic approach to manage employees across the world. Our cloud-based payroll platform gives you real-time access to payroll across all countries and currencies, aggregated reporting, and a US-based service team to help when questions come up. Get solutions to simplify your global payroll challenges – click here to learn more

Changes to Labor Regulations in India
Global People Strategist 

The central and state governments of India regulate and initiate new labor law reforms for the labor class. These laws ensure that fundamental rights are provided to all workers, focusing especially on equal treatment and decent working conditions. These laws are essential to facilitate doing business and to create more employment opportunities for the massive workforce in India.

The Indian labor law falls under the Concurrent List, which means they are created by both central and state governments. There are currently about 100 State laws and 40 Central laws. Due to the mismanagement of these labor laws and mistreatment in the work sector, labor law reforms were made to reinstate equality and improve working conditions.

The Ministry of Labor and Employment has taken several measures to improve work conditions and help improve standards of living. This will help to increase work output and the overall efficiency of the industrial and business sectors.

There are 4 Labor and Industrial codes passed by the government, including the Code on Wages, Occupational Safety, Heath, and Working Conditions, Social Security, and Industrial Relations. The labor codes claim to be transparent, simplified, and easy to understand for the entire workforce and are being celebrated as a significant step for labor reform in India. They aim to achieve fair and transparent enforcement of labor laws with accountability and to eliminate discrimination. The codes emphasize and promote ease of doing business in India.

Why Initiate Labor Reforms?
Many laws that were in place can be traced back to the time of the British Raj. These laws had become extremely outdated and irrelevant for the workforce today. Rather than protecting the rights of the labor class, these provisions were making working conditions more difficult. According to the previous legislation, if a worker had to claim any benefit, they would have to fill out four forms. Now 29 new labor laws have been incorporated into the new labor code categories.

Who Will Benefit from the new Labor Codes?
These laws are applicable to both organized and unorganized sectors in the workforce. According to these new laws, provident funds, employee retirement pension plans, and all types of medical benefits covered under employee insurance are now available to all employees.

The new codes hope to achieve non-discriminatory laws for all and efficiency in enforcement using technology. The labor codes apply to all employees regardless of their place of work, role, nature of tasks, and salary. Implementation of labor codes is a commendable step forward. However, it requires a massive shift in management for employers. They will have to assess the impact of the codes before finalizing internal policies and governance structures.

The government needs to provide clear direction on implementation plans and notification for the respective organizations of the central and state rules on timelines. The implementation of labor codes will most likely take a few years. As the law evolves, more clarity can be seen in some provisions of the labor codes, and better practices in the industry will start to surface.

To learn more about labor and compliance in India, visit Global People Strategist

Expansion and Technology Challenges
Meghan Holcomb, Sales Executive

One of my clients is experiencing rapid growth across 9 countries – adding employees, expanding into new countries, and managing hourly and salaried staff across the organization. They were overwhelmed with multiple vendors and partnerships in each country and trying to ensure compliance and keep track of payroll costs at the same time. They had regional teams across the EU, US, and Australia, so the payroll process was broken into multiple segments and vendors and no standardization. As they began expanding into 2 new markets and planning for future growth, they knew something had to change.

One of the largest concerns in the organization was the rapid growth and the lack of scalability across multiple countries. The local vendors were cumbersome to work with and using EOR vendors in some countries was becoming cost prohibitive. Since they have variable types of pay across the organization including hourly and salaried employees, many payroll solutions could not handle hourly pay rates in addition to salaried employees. This organization needed a technology solution that could aggregate their payroll and accommodate flexible working hours and salaries while scaling the business as it grows.

Another issue for the team was the complexities of their regional payroll model – they needed a standardized user experience across the board. The team in Australia needed to discuss specific in-country payroll questions, so we brought in our dedicated in-country contact in Australia to discuss their concerns. With our open service model, the client will be able to directly contact our team in Australia when questions come up.

With more than 300 global employees, this client can now utilize one system of record, one standardized process across 9 countries, and as they grow, they can continue to scale with one payroll platform for all of their employees. They can save money on costly in-country solutions and EOR arrangements, while simplifying their global payroll process. They can also use our global consulting services to help with entry into new markets as they expand.

If you are expanding or adding global employees, talk to our team before you get started. We can help with business and bank account setup, global payroll and compliance, and statutory requirements in each country. Simplify your global operations and ensure compliance – click here to learn more

Author: Blue Marble

Black Mountain Group

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