Can your payroll handle the complexity of NMW?

paiyroll® National Minimum Wage report

The government recently announced increases to the National Minimum Wage (NMW) in April 2020 with further legislation changes expected. Implementing and verifying adherence to this legislation is complex, difficult to understand and often involves manual setup and checking. It generally relies on payroll teams and their finance directors to ensure their companies adhere to the legislation and do not fall foul of government penalties, putting a lot of stress on these teams as deadlines approach.

The complexities of NMW should not be underestimated. Companies that have workers on a mix of salary, hourly or even piece work have to check their individual as well as consolidated rates. Workers age, holidays, benefits such as accommodation, or even travel time may need to be factored in. Also don’t forget that rates change each year, so just because your company met the rates last year, doesn’t mean all is well for the coming year. NMW adherence should be monitored on an ongoing basis, linked to payroll periods and not just once year when the government announces increases or new legislation.

Fortunately, advances in RPA (Robotic Payroll Automation) could help to reduce the effort, stress and cost associated with this. An RPA platform can load your payroll data, automate the checking of this data against current legislation, flag any violations of current rates and give you a sensitivity analysis of how close you are to current  rates. It can do this on an ongoing basis and will track changes in legislation.

Wouldn’t it be great to know that you are not risking any penalties, know how close you are to the limits and not be faced with panic and unbudgeted pay rises or penalties in April. Not forgetting the reduced stress on your payroll team?

I can see my pay at the beginning of the month!

Live payslip

“I get paid monthly and it’s the beginning of the month. From my mobile, I can instantly see my live payslip with all the payroll calculations showing gross pay, taxes and net pay. I love being able to know how much I am due anytime 24×7 without waiting until the end of the month”

Today’s workers expects the consumer experience

The traditional payroll process hasn’t changed for the best part of a century; consigned to the back-office or outsourced, manual processing means that it’s only ready at month-end – which is when the worker gets visibility of what they due. Compare that with the expectation of today’s workers who expect that every transaction of their lives is always available: “where’s my delivery”, “whats my bank balance” etc. In an on-demandreal-time world, it’s no wonder workers feel disconnected from payroll which is still batch processed.

How are Employers responding?

Employers now realise that their payroll needs to move into the 21st century. They are providing payroll directly to workers via mobile and desktop. This isn’t just a payslip portal which shows historical payslips, it’s a real-time view of their own personal payroll ready from the first day of the month. In fact, each time a workers accesses their “Live payslip“, the system runs their payroll, and prepares the payslip. It’s like a pay run, on-demand in moments!

Engaged Workers

Workers are uniquely placed to check their details and pay. For example, they directly enter their bank and address details, and they can check their tax code before it is applied. Similarly, they know what their gross salary, wage or hourly pay should be. Early visibility engages the worker with every element of their pay and benefit.  If anything is missing or wrong, it can be corrected before pay day. Feedback from the worker can result in zero errors, accurate pay, high levels of engagement and reduced frustration.

Bonusses and Commissions

“I work in sales and earn a monthly commission. The moment our finance admin loads the commissions spreadsheet into paiyroll®, my updated payslip is ready for me to view. It’s brilliant as I can catch any errors immediately and know what net pay I’m due at month-end.”

Pay items such as bonus and commission mean that many workers receive different pay each month. When there are errors, traditionally the worker doesn’t discover the error until after month-end.

Summary

Today’s workers demand a different experience, and smart employers are responding. By deploying Robotic Payroll Automation (RPA) technology, employers can lower cost and improve retention, while delivering on the expectations of their employees with on-demand, real-time, individual payroll:

  • Yesterday’s payroll can cost £100 per worker per year vs. paiyroll® starting at £18 per worker per year, when headcount costs for collecting, checking and managing pay data are included.
  • It costs on average £30k to replace a worker. Every 1% improvement represents a significant saving. Workers engaged with their pay and benefits increases satisfaction and reduces attrition.