Member Article

How to navigate global payroll through the challenges of Brexit

The impact of Brexit (the departure of the UK from the European Union) can be seen across many parts of our working lives. European travel rules have changed, and you will now need specific licenses and certificates for both imports and exports.

Brexit has affected our digital footprint, too. You will now need specific clauses to transfer personal data between the EU and UK. As a business, your teams will regularly handle confidential, personal data, most often through your payroll processes. Global payroll - an already complex process where teams will have to keep track of numerous data streams at any one time - has been hugely impacted by Brexit.

There are now strict regulations your company must comply with when you transfer any personal data between countries. It’s now more important than ever to safeguard your business, as we navigate our working lives through both the coronavirus pandemic and Brexit.

Whether you receive personal data from the EU or UK, here’s exactly how your global payroll will be affected by new Brexit regulations.

Brexit and global payroll: Here’s what to do if you receive personal data from the EU

If you receive personal data from anywhere in the EU, it must follow specific data protection laws. Your payroll team will regularly handle confidential and personal data. This is any information that could identify a person, for example staff working hours or payroll details. It’s important to not only protect your data, but ensure it complies with any new Brexit regulations.

Brexit shouldn’t complicate your global payroll any further. As a business, you should review your current payroll processes (if you haven’t done so already). You will be required by law to put measures in place between you and the EU sender. This will then enable you to transfer any personal payroll data between countries.

For most businesses, this will mean the use of a SCC (a Standard Contractual Clause). This is a legal contract that will help your business transfer any personal data - such as your global payroll data - to other companies in third countries (any country not in the EU). As the Brexit transition period has now ended, the UK is now able to produce its own SCCs for transfers made from the UK.

If you’re unsure whether your data requires a SCC, you can check via ICO’s interactive tool. This platform can not only ensure the most appropriate clause is used for the transfer but should support you at every stage.

It is now law that your business uses the correct clause for any personal data transfer. Ask your payroll provider if you have any questions or consider outsourcing further support for your global payroll.

Brexit and global payroll: Here’s what to do if you receive personal data from the UK

Similarly, if you’re based in the EU and you receive any personal data from the UK, there are a few steps to follow. Now the Brexit transition period has ended, you can continue to use any existing SCCs you have in place for any data transfers. You should make any changes to the clause to reflect the new laws. For example, it’s important to change any references from the old EU Data Protection to the UK GDPR.

For any new personal data transfers, you should use the current EU SCC. You must only transfer personal data that complies with the new regulations.

As a business, it’s important that your global payroll data remains compliant with new Brexit regulations. You should continue to check for any further changes because of any new rules, to ensure it always remains accurate.

Brexit and global payroll: Next steps

1. Understand your data flows

Your first step should always be to understand your international flows of personal data. Identify and note down any data transfers that take place between the UK and EU. You should also review any existing data transfers, to ensure they comply with any new laws.

It’s important that both your payroll and HR teams understand these data flows, too. Although it’s timely, make sure anyone that regularly handles personal data is aware of all your business’s data flows. Whilst it’s a lengthy process, it can cost your business money, time, and its reputation if you transfer data incorrectly.

Whether your team are currently working remotely or you’re back in the office, you should set up regular catchups with any employees who regularly handle personal data in global payroll. It’s vital that any data flows are updated, and all team members are aware of the current Brexit regulations, and what this means for the business.

2. Develop the required Standard Contractual Clause (SCC)

The best option for any international personal data transfer now is via a Standard Contractual Clause. Whether you’re EU-based or your business resides in the UK, it’s important to know which clause is required for any international data transfer.

You can use ICO’s interactive tool to develop the correct SCC for your payroll transfer. If you outsource your global payroll, share any questions with your payroll provider that you’re unsure of.

3. Create a centralised payment system

Finally, global payroll can become complicated very quickly. Whilst global payroll is the same payroll process as usual, what makes it complex are the varied tax laws for each country and expensing payroll in different units of measure. Often, many global companies still manage multiple bank accounts in different countries. This can quickly become overwhelming.

Now with the added pressure of Brexit on your global payroll, you should consider centralising your payment system. This is when one company in an organisation manages any outgoing payments between other businesses in the same organisation.

A centralised payment system has a wealth of benefits for your business. Not only can it hold all data in one place so all staff can easily access, but it also improves functionality across all parts of your organisation.

Centralising your global payroll system can quickly become challenging. It’s important to seek support from your payroll team or payroll provider before progressing this change. Centralising your payroll process must be implemented successfully, for both your business’s reputation and your employee’s wellbeing.

Whether you’re UK-based or your business is in the EU, there’s new regulations to follow. As a business, it’s important to be aware of the new laws put in place, and how these will affect your organisation. Similarly, ensure any individual who regularly handles any personal data is in full knowledge of these laws.

This was posted in Bdaily's Members' News section by Simon Bradbury .