Payroll compliance: Key strategies to navigate legal boundaries

Payroll compliance is an essential matter that companies should be careful about and abide by the legal rules. The concept is often seen as a difficult labor maze with all the legal requirements for employers to pay their employees, submit taxes, and ensure proper record-keeping.

Disregarding these regulations may result in operating penalties, legal assessments, complaints, restriction of operations, and reputational harm. The article will explore the importance of payroll compliance and focus on the strategies for navigating legal borders associated with payroll management.

Understanding payroll compliance

Payroll compliance forms the base of business operations. It contains the rights of workers and keeps employees fairly paid. This covers the minimum wage, the right to break, overtime, leave entitlements, the right to dismiss with due process and non-discrimination, and various health and safety legislation. Again, these legislations place upon the employer the burden of compliance by law.

In April 2024, the Department of Labor announced that it would be releasing the final rule amending the existing regulations for white-collar workers, executives, and professional employees under the Fair Labor Standards Act, effective July 1, 2024. Significant changes include raising the minimum salary required for exemption and a method to update that salary automatically in the future to ensure its purchase power against increasing wages.

Key strategies for ensuring payroll compliance

1. Research and understand local laws: Companies that run businesses in several countries should approach this by means of thorough research and understanding the labor and employment laws in each constituent jurisdiction. In other words, they should be fully conversant with the minimum wage, the regulations related to overtime, and many other rules that apply to all the places they operate to enable their compliance.

2. Maintain accurate records: Every employer shall maintain his record to be accurate and up-to-date. They comprise information related to employment (recruitment, selection, training, agreements, etc.), contracts, timesheets, payroll records, and tax documentation. At times, for instance, in the case of archival regulations, the archival policy is given in an enforceable manner by the laws set by the local judges who stipulate the duration of preservation.

3. Stay updated on regulatory changes: Labor law is dynamic, and therefore, employers need to reorient themselves and think about how the new regulations might affect their business. Subscribing to mailing lists, membership in industry associations, and visiting government sites regularly help gain the latest information on payroll regulations.

4. Collaborate with compliance experts: To correctly and timely detect and deal with legal challenges, consult experts in international labor laws and have them review or audit your processes regularly. These experts will make certain that your HR and payroll meets all current changes in payroll law.

You will require sufficient time and resources to carry out the above strategies successfully. Instead of worrying, the other option is to leverage EOR platforms like Global Squirrels to have them take the employer’s responsibility. We’ll take care of HR, payroll, and benefits for you right on our platform. The resources hired by us will act like your full-time employees, but you will not have employer obligations.

Global Squirrels can help you with remote hiring and payroll regulations across borders. Our automated SaaS-enabled platform performs these complex tasks under the constant supervision of our industry-experienced teams.

Related read: 12 Payroll Best Practices for Enhanced Efficiency in 2024

How does Global Squirrels handle HR and payroll compliance as an EOR?

Global Squirrels offers comprehensive solutions to streamline businesses’ payroll compliance. Here is how we excel in this area

1. Effortlessly manages your workforce in one place: Our platform provides all the tools you need, from extending contracts and processing terminations to handling pay adjustments, leave requests, timesheets, performance reviews, and even expense approvals. Take control of your contingent workforce with a single, streamlined solution.

2. Automated payroll processing: Our software, with the help of advanced payroll law, calculates pay without the risk of human error. By doing this, we ensure timely payments. Automation of such procedures delivers a wide range of benefits. Firstly, it eases record-keeping and ensures that everything is done according to the existing laws and regulations on the payroll.

3. Secure payroll system: Global Squirrels ensures the security of employees’ data by utilizing a secure system that protects against hacks and access from unauthorized users.

4. Our platform cuts through the red tape: Forget juggling multiple systems and dealing with staffing agencies. Contractors you hire through us focus on what truly counts: getting your project done. Do not get bogged down by agency bureaucracy or the agency training new staff while performing your project’s tasks. This means more productive hours dedicated solely to your project’s needs.

Through the Global Squirrels partnership, the entities can not only master the complexities of payroll compliance but also avoid violating relevant laws and thus focus on their core functions.

Also read: Top 8 Payroll Software Features

Conclusion

Maintaining payroll compliance with an interwoven network of rules and regulations helps companies meet legal requirements and keep employees on an equal footing. Through a knowledge of payroll law, accurate record keeping, and proper classification of employees, businesses can diminish risks and maintain a compliant workplace.

Platforms like Global Squirrels can help you manage your global talent by acting as their legal Employer. This means that you will not have any duties concerning the employees’ management as all the HR and payroll regulations will be performed by our platform, including the payment of the employee’s salaries. Plus, our unique pricing model ensures you pay top dollar to the best workers, whether onshore or offshore (worldwide). Well, this is the best thing that could happen to you and the international talent you are looking to hire! Get started today by requesting a demo here!