By Alla Umanskiy
Sr. Communication Specialist – BSI
In 2020, The COVID-19 pandemic changed the way we work and forced many organizations to quickly adapt to employees working remotely. As a result, payroll departments had to adjust operations to ensure employees were paid and tax returns were filed accurately and on time based on remote work locations. With remote work becoming the new normal, it is important for payroll departments to understand the challenges and opportunities associated with this shift.
Challenges of Remote Work
One of the biggest challenges that payroll departments face with remote work is ensuring that payroll taxes are paid correctly. This becomes difficult when employees work in different geographic locations and when there are multiple payment methods, such as direct deposit, check, or prepaid card. In addition, employees must update their personal demographic information with their Payroll/HR departments each time they change permanent work locations. If the correct work location is not known to the employer, improper taxation would cause possible fines and penalties.
Tracking work hours worked may include requiring employees to log their time using an online time tracking system or an app. Companies should provide additional training and support to help employees manage their time effectively while working remote.
Technological Solutions
To address the above challenges, many payroll departments have turned to cloud-based payroll and payroll tax software solutions. These software solutions allows payroll professionals to access employee information from anywhere and automate many payroll processes. This makes easier to manage the volume of work.
There are numerous tools and technologies available to help payroll departments manage their operations more efficiently. For example, many payroll systems now offer online portals that allow employees to remotely access their pay statements, tax documents, and other essential information. Some payroll systems offer integrations with other HR and accounting tools, which can help streamline payroll processes and improve data accuracy. By leveraging technology, payroll departments – even in a remote working environment – can work more efficiently and effectively.
Stay in Compliance
Another concern that payroll departments face in the new remote work environment is ensuring compliance with various state and local tax laws. When employees work remotely, it can be more challenging to determine where they are working, and which taxes should be withheld. This is especially difficult for businesses that have employees in multiple states or jurisdictions.
Employee Benefits Challenges
Remote work has also brought about some difficulties dealing with employee benefits. When employees work remotely, it can be tough to offer the same benefits that are available to in-office employees. For example, it may be complicated to provide access to a company gym, or to offer free lunches.
To this end, businesses are rethinking their employee benefits packages. Some are offering allowances for home office supplies, while others are providing access to health services through telemedicine. Flexible schedules and unlimited paid time off are also being offered by some organizations to help improve their employees’ work-life balance and job satisfaction.
Payroll’s Strategic Roll
Finally, the remote work paradigm presents a chance for payroll departments to take a more strategic role within the organization. With the use of data analytics and other technologies, payroll departments can better identify trends and insights related to employee compensation and benefits, and other HR-related metrics. This information can then be used to make informed decisions around hiring and retention.
The shift to remote work as a permanent construct in working lives has also brought about changes in the way that payroll departments communicate with employees. When employees are working remotely, it can be difficult to provide the same level of communication that is available in an office setting. This can make it challenging to address employee questions and concerns, and to provide timely feedback.
To deal with this, payroll professionals are using video telephone software programs. These programs allow for real-time communication between payroll professionals and employees, and they can also be used to provide training and support. Additionally, companies are implementing regular check-ins and employee surveys to gauge employee satisfaction and address any concerns.
There is no doubt that shifting to a remote working environment has brought about issues for payroll departments. From ensuring accurate and timely payment of employees, to complying with tax laws, to offering employee benefits and communicating with employees, payroll professionals have adapted quickly to this remote working landscape. By embracing cloud-based payroll software, using dedicated payroll tax solutions, rethinking employee benefits, and using communication tools, payroll departments can effectively manage payroll in this environment that is here to stay.
