Conference 2018 The Future of Payroll. Ken Gurr

Transcription

1 Conference 2018 The Future of Payroll Ken Gurr

2 Without yesterday there is no tomorrow

3 Much has changed in the last 50 years Back then we were only concerned with: Calculating tax Sticking National Insurance stamps on cards Manually completing pay using Kalamazoo Working out how much cash we needed every week Putting the cash in envelopes with the payslips

4 Payroll has always adapted to change Court orders Developments in tax and NI Computerisation Statutory payments Decimalisation Real Time Information So what is next?

5 UK Exit from the European Union

6 UK Exit from the EU The UK leaves the EU at 11pm Friday 29 th March 2019 Although there may be a further transition period of possibly 2 years On leaving, the UK enact the Repeal Bill To repeal the European Communities Act 1972 To preserve current EU law until decisions can be made under domestic law Allow changes to legislation And bring in new legislation where completed e.g. The Data Protection Bill to replace GDPR.

7 UK Exit from the EU A substantial component of UK employment law is grounded in EU law. After exit a number of high profile areas could be reviewed and changed: Predictions The Alabaster Ruling desired but unlikely soon The Working Time Regulations - political Holiday Pay urgent need for legislation change Sickness Rules recommended by Taylor review TUPE agreements mostly technical changes but removal of influence of CJEU Discrimination and Equal Pay Fear of weakening of Equality Act 2010.

8 UK Exit from the EU Effects Essentially no immediate impact for payroll Future changes depend on: Political will, and When the CJEU ceases to have authority.

9 The Taylor Review

10 The Taylor Review of Modern Working Practices The government requested a review on modern working practices They charged a senior group to complete a review of the impact of modern working models in line with organisations: Strategic Shift Changing workforce Changing demographic and employee status Different working practices Accelerated automation The group was led by Matthew Taylor CEO, Royal Society of the Arts The outcome was published on the 12 th of July 2017 The review was based on several key recommendations.

11 The Taylor Review of Modern Working Practices The report gives no legislation or laws but concentrates on recommendations built around three categories Tackling exploitation and potential exploitation in the workplace Increased clarity in law and the rights of employees and workers and the self employed Long-term alignment of incentives and objectives driving good work.

12 The Taylor Review of Modern Working Practices The Seven Aims: The British Way good work for all fair, consistent and balanced rights that are the same for all The move to Dependant Contractor status to assist in standardising worker status and to support the platform based (Gig) worker Stronger laws to help organisations make the right choices and improve working practices as well as better working protections Responsible corporate governance, transparency and good employee relations Stronger prospects, enhanced development and better learning to create a better workforce The shape and content of working designed to improve employee health and a general proactive approach to workplace health The National Living Wage lifting the financial baseline and moving up from minimum pay.

13 The Taylor Review of Modern Working Practices Recommendation 1 Clarity In Law Individuals need to understand their status, protection and rights Clarification is required for the line between workers and the self-employed Remove the incentives for employers to gain advantage through adapting business models which disadvantage workers and cutting costs A better framework in legislation rather than the reliance of case law with clearer tests for employment status and moving these to primary legislation Maintain the current three tier approach but rename workers as dependant contractors DC s (people with rights who are not employees) Develop a test for a dependant contractor (DC) status through an on-line tool Review DC s by adapting piece rates legislation so gig workers have flexibility but attain NMW A written statement for all workers on joining in the same way as employees.

14 The Taylor Review of Modern Working Practices Recommendation 2 One-Sided Flexibility A review of possible higher NMW levels for different work scenarios led by the Low Pay Commission (LPC) The Government should ask the LPC to review a higher NMW for hours worked over guaranteed work within a contract Extend the break in service rules from one month to a year for qualifying for continuous service where justified by sporadic work Improve awareness of holiday pay referenced to 52 weeks to allow for seasonal variations and the possibility of returning to rolled-up holiday pay Incorporate the right to a direct contract of employment to agency workers after 12 months with the same hirer which reflects their actual hours, as well as zero hour contractors who have worked for 12 months.

15 The Taylor Review of Modern Working Practices Recommendation 3 Responsible Business Improving relationships between employers and their workforce through engaging other bodies such as Acas and Investors in People to ensure a focus on good employment engagement Encourage a voice in the work place Review transparency in business around the structure of their workforce to improve on informed decisions Govt should introduce duties on employers to report on workforce structure Requests from zero hour contractors to move to fixed hours Requests from agency workers requesting permanent status.

16 The Taylor Review of Modern Working Practices Recommendation 4 Fairer Enforcement Ensuring employment protections are enforced and issues addressed through government bodies: HMRC, Gangmaster and Labour Abuse Auth.,The Employment Agency Standards Inspectorate, The Health and Safety Executive Correct state support for successful claimants and ensuring they get monies paid to them: Individuals should be able to receive a determination of employment status and their rights without paying a fee and instead going through a preliminary hearing Reversing the burden of proof in a tribunal dispute so the employer has to prove an individual is not entitled to the rights in question Improve the enforcement process and make it simpler where employers do not pay tribunal awards without the requirement for extra paperwork and fees to the claimant Establish a naming and shaming scheme for non payers Consider aggravated breach penalties for repeat employer offences Moving control, responsibility and enforcement of NMW, sick pay and holiday pay to HMRC.

17 The Taylor Review of Modern Working Practices Recommendation 5 Incentives in the System In 2016 HMRC collected 670bn in tax receipts However, the current scheme gives rise to bad practice such as incorrect claiming of self employment status Treating different forms of employment more equally reduces the issue and reduces the tax black hole Continual review to address the disparity between the level of tax applied to employed and self employed labour.

18 The Taylor Review of Modern Working Practices Recommendation 6 the Self-employed The government need to recognise the variety of forms self-employment now appears in the work force and encourage the self employed to plan for the future Remove the need for the tax payer to pick up the additional costs through their retirement and Ill Health Develop advice and support for people embarking on a self-employed career through schools, mentors and Jobcentre plus including Apps and Software for small business Review and improve the pension provision and move to cashless transactions including auto enrolment Review a dynamic system of taxation through the extension of making tax digital to assist in compliance and transparency of payments.

19 The Taylor Review of Modern Working Practices Recommendation 7 Scope for development Focusing on the lower-paid, enabling people to remain in work and be more enabled and allow workers to improve skills and experience through their working life Including apprenticeships, transferable skills and better interaction Once the apprenticeship system beds in, review how it could be used for making work better for atypical and agency workers Expanding the use of apprenticeship funds held Remove exploitative unpaid internships which damage social and business mobility.

20 The Taylor Review of Modern Working Practices Recommendation 8 Opportunity to progress Employees and employers should be able to agree terms and conditions that suit them both above the statutory minimum Work to design more flexible jobs that allow people to remain and progress in the labour market and to match and work with their circumstances that may change Review and work to evaluate the Right to Request Flexible Working due in 2019 and how to promote genuine flexibility in the workplace Example temporary changes to contracts Review and consolidate rights and guidance around protection of women on maternity or who are pregnant against discrimination Review outdated statutory sickness rules as an employment right similar to NMW to ensure they re eligible regardless of income from day 1 and accrued on length of service in a similar way to holiday Review job protection for longer periods of leave through sickness.

21 The Future of Payroll Employment Issues

22 Off Payroll Working Off payroll working rules changed for public sector from April 2017 Consultation this year to see if this should be extended to the private sector Purpose to ensure individuals who effectively work as employees are taxed as employees, even if they choose to structure their work through a company Impact considerable for employers

23 Nomad Workers Workers work where they want to Common in IT Work using hotspots or low rent/short term local offices Challenge ensuring correct taxation as workers move between different tax authorities Impact minor at moment but growing

24 The Future of Payroll Technology

25 Digital Ledger Technology Technology that underlies Bitcoin Removes the third party when making payments Lower transaction costs Payment flexibility Transparency Better security because payment encrypted and distributed virtually impossible to falsify content.

26 The Future of Payroll Additional Thoughts

27 Demise of P45 Payrolling benefits Removal of opt out from auto-enrolment Additional Thoughts

28 Thank you for attending Any Questions?