SAP Payroll Compliance: Extending Support During COVID-19
The global spread of COVID-19 has put businesses into disarray. The long period of lockdown enforced by many governments has changed a lot of things. We’re all practicing new ways to work (remote work), use software, and pursue learning. We’ve also come across many compliance changes since governments across the world are trying to help their people through the HR and Payroll Systems. Due to this, many SuccessFactors partners have released add-ons, extensions, and functionalities to help users. Free-of-charge COVID-19 extensions for SAP SuccessFactors are available where customers can directly download the instructions from the website and set up the extension in their system as a self-service application.
Related Reading: How SAP Supports Effective Business Continuity Planning
Getting the most out of SAP SuccessFactors Solutions
It’s the right time for customers to think outside the box in terms of getting the most out of SuccessFactors Solutions. The flexibility of SuccessFactors allows you to use it in new and different ways. SAP customers can also use SAP Jam to put out announcements, publish status updates, messages from leadership, and other questions about how to use the solutions that they have, to the best capacity.
Since most people are working remotely for the first time, staying connected is more critical than ever. Companies can also leverage SuccessFactors Onboarding for a relaunch and get the business going since many organizations have opted for temporary lay-offs. So to relaunch and get these resources back on-board, this tool can be used effectively.
Valuable information at your fingertips
Lots of countries are putting out programs for helping workers manage lay-offs, helping companies with cash flow, and giving them financial breaks so that they can retain their workers longer. These approaches are specific and differ from country to country. SAP has created a blog to bring all those updates together in one place. Employers can leverage the schemes that several governments across the globe have announced to prevent mass lay-offs. However, these rules and schemes are subject to constant review and it’s important for employers to review and plan before implementation. Every country HR and payroll need to collaborate to ensure that the changes are correctly put into effect.
Legal changes announced by a few countries w.r.t payroll
Following are some legal changes announced by a few countries w.r.t payroll:
The United States:
The state and federal wage laws mandate employers to pay minimum wages to their employees and time and half the regular hourly rate exceeding forty hours in a workweek to non-exempt employees. The FFCRA (Families First Coronavirus Response Act) demands employers with a staff less than 500 to provide a paid sick leave of 10 days along with FMLA leave for reasons related to COVID-19.
Employers can obtain tax credits for Social Security and Medicare for statutory benefits. This Act allows employers to retain the amount of payroll taxes equalling the amount qualified for sick and child care leave rather than deposit it with the IRS. If employers find that the payroll taxes are insufficient to cover the cost of statutory benefits that have been paid, they can file an accelerated payment request with the IRS. The IRS would process these requests within two weeks.
The United Kingdom:
The UK government has come up with the Coronavirus Job Retention Scheme wherein they have pledged to reimburse 80% of wages for furloughed employees up to 2500 pounds per month. All employers in the UK are entitled to this scheme. The main objective is to help those employers retain their staff who cannot afford to pay salaries. They can then get those employees back on board once they start rebuilding their businesses.
The Australian government has implemented a broad range of measures to provide relief to employers through its “JobKeeper Payment Scheme”, where wage subsidies will be granted to employers affected by COVID-19. This will allow employers to pay their employees and such payments will be exempted from payroll taxes.
The Pay-Roll Tax Relief (COVID-19 Response) Act 2020 that took effect from 1 March 2020 outlines the payroll tax waiver and the exemption for payments made under the JobKeeper Payment scheme. The payroll tax relief approaches in the country differ from state to state and employers need to carefully follow the corresponding province’s website to learn more.
The Canadian government has announced a 10% wage subsidy for qualified small businesses. To avail of this benefit immediately, businesses should reduce their remittances of income tax that has been withheld from their employees’ remuneration.
The Canada Emergency Wage Subsidy Act that was announced on April 11, 2020, states that the employers who have lost 30% of their revenue due to COVID-19 are eligible for a subsidy amount equalling 75% of employees’ remuneration paid up to CAD$847 per employee per week for a 12-week period.
Brazil’s government has announced provisional measures such as a temporary suspension of employment in business sectors that are adversely affected by the pandemic. The authorities have considered permitting employers to reduce the working hours and salaries of their workforce by 50%. Additionally, the employees are to be allowed to take collective vacations with prior notice of 48 hours and individual vacations for 15 days. The employers have to make teleworking arrangements and include flexibility in banked hours.
Employers should note that such schemes have a wage ceiling, so high earners may encounter greater losses of income. Since the main aim of these measures is to save jobs, employers who utilize these schemes are prohibited from continuing business with a reduced workforce simultaneously.
The present global crisis has highlighted the essential function of payroll. If payroll fails, everything comes to a standstill. SAP Payroll can help you maintain resilience and ensure smooth operations. Connect with us to find out how your business can leverage payroll compliance with SAP.