Payroll Department

The report will be able to analyse and compare existing employee contracts to Legislative requirements. Payroll department is one of the most critical parts of any company or any other institution. The department is responsible for determining the amount of salary due to each employee, they work as a team to make sure that the distribution of payroll is to everyone, and they also make sure they follow the legislation and equality acts. Below is the principal responsibility of a payroll department; timekeeping, which is essential to any institution, keeping records, whenever certain documents are needed they should be able to provide, employee benefits,    accounting the payroll, the relationship between employees, calculating and paying salaries.

The human resource and payroll department are closely related and usually support each other. Therefore, an excellent communication within both departments is highly required. The team comprised of 6 personnel’s the five payroll administrator and one payroll manager, they were working for a recruitment company. The team was to make sure everything in the payroll department went according to the company statues and followed the government laws.

There are various sources of legislation which include ;( I)  Acts of parliament. It is an act that is enacted by the parliament (ii) Delegated /secondary legislation, they are a statutory instrument that is formulated and agreed upon by ministers (iii) case law or common law, actual cases establish this in a court. There is the number of bills that affect the payroll process; one being employment act which constitutes employment protection, employment act, wages act and trade union reform and employment rights act. The employment act covers almost every area of payroll administration, some of them being contracts of employment, termination of work, the pay slip and deductions from pay.

The other law is the employment relationship act, which covers the rights of an employee. The following are some of the bills; maternity rights, parental leave and time for the family crisis. Following the comparison of any individual cases that have been adopted will be investigated. The team ensured that all this legislation were adhered to avoid any misunderstanding between the employer and employees, though they found out that there is the violation of one of the law and they had to reverse it. The employee did not indicate any deductions that were made of which it violates the law, to avoid such future eventualities the payroll administration must make sure all required information is inclusive before the release of any pay slip (nidirect, 2018).

The Transfer of Undertakings (protection of employment). This regulation ensures that the transfer of business or undertakings to another employer all the employees’ terms and condition remain intact. When does TUPE applies, first it applies when there is a business or undertakings are transferring to another employer and when a service provision changes. Sometimes it’s tough to measure the service provider change.

There are various ways TUPE does not apply; share takeover, assets transfer only, transfer of the contract to provide goods and services and transfer of undertakings outside the united kingdom. The effects of TUPE have been seen throughout the years, whereby employees can enjoy the same conditions before a transfer of employers. However, there are limited options that are provided to the transferee or the transferor to vary.  Finally, the TUPE also contains specific regulations that protect employees from being dismissed after the transfer takes place (The University of Edinburgh, 2017).

Things that TUPE is aimed to achieve, contractual maintain ace, employment consultation, pension requirements, dismissal, information from transfer to the transferee and legal responsibility of the new employer. Sometimes because of conflict of interest transferring services from one employer to another, some employees are sucked. In this case, this is what happened, and the payroll department noted that and they had to undertake necessary actions to ensure that that they follow the instructions. The employee must be given specific instructions from the department of payroll giving them rights that protect all workers. to avoid problems in future

The holiday pay, this are rights given to workers of assessing payment when on holiday for example; sick pay, maternity pay, holiday pay and pension pay. The part-time regulations 2000 came into effect from July 2000. The rules extended the full-time conceptual rights to part-time workers (Carvel, 2012) the law also protects the full-time worker to make sure they don’t feel disadvantages compared to part-time workers. This regulation does not apply to various people; the military personnel, agency workers, fixed-term employees on training, fixed-term employees who will be working on another scheme and apprentices or students.

All workers are supposed to work either part time or full time equally. In case of favourable treatment, the reasons must be justified. The team found a lot of irregularity; the new company was paying all workers at a rate of one day holidays. The error caused a rampant whereby all workers were calling and emailing the contractor. Everyone was affected because one was either underpaid or overpaid. The team had to work fast and efficient to rectify this violation of workers right before the employees take the matter to the court which is punishable. The team ensured that they had done various things; found advice from HMRC, made all the adjustment in the payroll system, wrote multiple letters from contractors to workers notifying them of the error and made some correction in the payroll system to make sure that the next pay slip reflects correctly.

To avoid future occurrence of such problems the team ensured that there is a consistency in payment of holiday pay to every worker. They set up a standard way of holiday pay that will provide equal distribution of compensation to all workers; this will also avoid the company from being sued in a court of law.

The payroll department takes action on any payment or deduction made. They usually get this information from the third party like HM Revenue and Customs, Department of works and pension, sometimes the employer or employee. They are given various instructions like deduction to contribute to a pension plan. In any institution, it’s important that the payroll department justify any transaction taking place either a deduction or an increment. Some requirements must be meet by the payroll department such as, to ensure the information is legal and correct and does it comply with the institution policy (Anon n.d).

HM revenue and customs and department of works and pension are the significant sources of instructions which conform to the law. The employer must adhere to the guidelines given by this bodies, for example, apply the correct tax code, deduct the correct NIC and interpret any rights and statutory accordingly. Payroll must ensure proper lawful application, at least all employees are paid national minimum wage and finally the accurate assessment of Tax. Most the employees from public sector have a fixed salary so the head of a department must ensure they asses rate of pay. The payroll department must also consider deductions and provide that before any transactions all parties have signed. Under s 13.27 Employment rights act 1996, an employer is not allowed to make any inferences until it meets the following qualifications (Gov.uk, 1996); authorised to make a virtue of any statutory provision, permitted to be made a provision of workers contract and the worker has acknowledged the move of deducting any payment.

To recover money from the employee, the employer might deduct it as stipulated by the act of law (pay as you earn) PAYE. The bill has recently changed and not paying a worker according to the required national minimum wage is a crime and any alteration or deduction without any permission. The payroll manager has to consolidate the previous minimum wage and the current one and ensure all workers feel the effect of the change.

The bank statements and pay slip were not reconcilable, some of the money that was needed to pay the employers. The team found out that out of three million and five hundred thousand that was supposed to be paid to all employees only 2 million reflected on their pay slip, this showed that there was some deduction that was made but did not reflect on their payslip. The employee had violated the law because they found out there was no consent from the workers, so the department had to pay all of them the deductions that had been omitted from their wages. Though such deductions are allowed by law as stated in ERA 1996 part 17 and 18 that specifies such limits (CIPD, 2012). The team made sure such eventualities are avoided by asking the workers permission so that in the next payment period there will be no complains (Acas, 2012).

The payroll department is there to provide high-level services. They have two key areas of concern that’s is to the employees and employers. To the employees, payment of salaries and wages, receiving queries and unique arrangements of any changes. To the employers, correct application and meeting the agreed employer. There is a definite need for excellent communication between the employers the HR managers, payroll, and employees. Implementation of any changes usually have some costs. The final considerations are the impact of the use of the payroll system at the moment, from small prepared payroll to large computerised systems. Ongoing variables changes are also significant especially for shift workers or weekend workers (how, n.d). 

Permanent changes are the most regular transaction notified to the payroll department for implementation on behalf of the employer. These changes include a variety of events; promotion to a different job, transfer to different location and reduction or the increase in salary. To proceed with permanent, there are essential details that are required, for example, the name of the employee, type of change, the day the change will take place, reasons for change and details of the change. Such kind of data is essential to make sure that there are correct calculations. It is crucial to consider serious consequences incurred in case of an error when creating this changes.

Day in day out the payroll department face variations in contractual arrangements. The two types of changes are; absenteeism and varying hours. It is a sensitive area to the payroll manager on which method to use to implement the effect either positive way or contrary. Any decision made will affect the overall payroll and sometimes it’s a problem when doing the auditing.

The team discovered that with several employees who had sic period out. They all had an increase in salary of 4% which took effect immediately they went out of the job. Then after they came back, six months later they are still getting the 4% raise that they were receiving when sick. The department had to rectify the error by calculating all the overpaid money again and be able to make some deductions, by doing this they first notified the workers who have been affected by the changes. To avoid such incidents in future the payroll department made some few changes, they added a Colum of return date in the data and notified all workers that if you are back from any leave, you must notify the department.

There must be a proper way to pay the employees who are living the organisation or the institution. The reason for leaving may be valid, but one goes according to the laws stipulated by the company. However, there is two necessary procedure attached to all types of leavers; the requirement to calculate the final pay and make sure all the payroll records are amended. The payroll department deals typically with regular leavers’ day in day out. What this type of information for employees leaving is usually communicated to the payroll through the human resource department. HMRC document p45 must be signed when they make the last payment. Until 2013 the p45 was distributed in various ways, part 1 sent to the employer and part 1a, 2, three sent to the employee.

On leaving the following documents are generally returned to the employee for future use; CA4139 (CF383) certificate of election and CA4140 (CF384) certificate of exception age.

Employees who are going to retirement undergo the same procedure with the regular leaver goes. Many employers provide better redundancy rate than the normal one stipulated in the legislation. Though some employees are not entitled to redundancy, the military and house of ordinary card staff. Some employees die during their service, this is usually a sensitive matter, and several departments are involved in obtaining the diseased information. The team encountered such unfortunate incident, and they had to coordinate several departments like human resource and get the invalid information.

Foreign employees, employee working abroad, temporary and casual employees. There comes a time that those employees fall under that particular circumstance and the payroll department must come to the rescue and make different decisions, for example, industrial action. In 2004, the European Court of Justice found that the SMP regulations failed to implement EU law correctly, and as a result in 2005 the SMP regulations were amended to become compliant (UK Border Agency, 2012).

The team found one of the employees was from Kenya; this employee had to get special privileges according to the law. The payroll department has to ensure that the employee is not mistreated (INAC Department performance report, 2009).

Equal opportunity, this is right against discrimination and to be treated differently regarding race, age or disability. Perception is against the law and is punishable. In any institution, one is required to consider all people equal. To enhance teamwork and pleasant environment for working the team must unite all employees. The 1995 Disability Discrimination Act and employment states employers have to look at what changes they could make to the workplace or the way the work is done and make any changes where reasonable (Jennex, M.E, 2008).

The contract of employment and legislation, these two aspects work very well together. They integrate very well this helps a lot the payroll department. The team has experienced both success and failure all along. The team need more training and learn to work under intense pressure and on time scheduled.

All the regulations and laws that govern all these procedures are well laid down, and they don’t contradict each other. If there are no rules, the process will be ungovernable and with a lot of chaos.

The team needs a better structure and good coordination, training for all members to ensure they get acquitted of new legislation. The team should bring up better reports at the end of every financial year to provide a better presentation. To work with a payroll one must have high integrity, and before joining, I recommend that conduct an interview. All the workers must meet specific criteria for admissition to the payroll department. The team manager and other members are the ones to conduct the interviews. 

References

Nidirect. (2018). A guide to rates| indirect. [Online] Available at https://www.nidirect.gov.uk/campaigns/guide-to-rate  [Accessed 5 May. 2018].

Gov.uk. (2018). The National Minimum Wage and Living Wage - GOV.UK. [Online] Available at https://www.gov.uk/national-minimum-wage [Accessed 5 May. 2018].

Anon, (n.d.).Criminal procedure and investigation Act 1996. [Online] Available at https://www.legislation.gov.uk/ukpga/1996/25/contents.

Vanesa Robison (2012) CIPD Annual conference and Exhibition, Manchester, UK, 8-November, strategic HR review (11).

Edinburg law review (2017) Exercising a contractual right to terminate: what’s good faith got to do what it? https://www.euppublishing.com/doi/abs/10.3366/elr.2017.0390 [Accessed 5 May. 2018].

Ehow(2018) How to videos, Articles&more.Discover the expert in you /eHow.com

https://www.ehow.com/.

Gov.uk .UK Border Agency –GOV.UK

https://www.gov.uk/government/organisations/uk-border-agency.

Murray E .jennex (2008) Impacts from using knowledge.International journal of knowledge management. (51-64).

INAC (2009) Aadnc-aandc.gc.ca 

https://www.aadnc-aandc.gc.ca/eng/1338471861166/1454964057806.

Tim Barmbly(2012) Human capital, matching and job satisfaction, Economics Letters (548-551).