The March 2023 Blue Marble newsletter discusses the challenges integrating U.S. and global payroll, understanding in-country labor laws, and compliance challenges with global expansion.
Challenges Integrating U.S. and Global Payroll
When it comes to managing a global workforce, there are so many factors to be considered. Hiring and onboarding, getting payroll up and running, unique requirements in each country – it can be very difficult to keep track of every detail and ensure compliance. When you also factor in your U.S. employees, integrating your payroll process gets even more complicated. Using different vendors and systems, with varying deadlines and processes, makes integration a huge challenge for most companies. Here are the main considerations when you are looking to integrate your U.S. and global payroll.
Payroll technology in the U.S. has come a long way in automating processes and streamlining operations for payroll teams. But when it comes to global payroll, there is a long way to go. Each country has unique payroll and compliance requirements, and it is very common for in-country payroll vendors to use manual processes or technology and systems that are not able to integrate with U.S. payroll platforms. The result is often using spreadsheets and email to manage global payroll data, which can lead to errors and compliance issues.
Using in-country vendors is common when expanding overseas. But once you have employees across multiple countries and different vendors in each country, integration becomes less likely due to system capabilities and different data processing. Aggregating data becomes a very manual process, and in many cases, data is not consistently provided on a timely basis so there are no checks and balances to make sure everything is in compliance across each country.
Reporting and Data
Payroll reporting is a huge challenge when using different systems across multiple countries. Lack of consistent data and reporting is one of the biggest pain points for multi-national organizations, as there is not a single system of record for all employees. Without integrated, accurate reporting, your team can’t identify errors, track payroll costs across all countries and currencies, and ensure payroll compliance in each country.
Integrating U.S. and global payroll helps scale your business as you grow and prevents challenges with reporting and compliance across multiple countries. Blue Marble has helped companies solve their integration challenges with one platform to manage employees across 100+ countries. Our aggregated system provides payroll in real-time across countries, with customized, aggregated reporting across countries and currencies. Our integration with Paylocity, a leading U.S. payroll provider, gives you a single-sign-on to manage U.S. payroll and integrated reporting so your U.S. and global payroll reporting is in one place.
Understanding In-Country Labor Laws
Companies planning to expand overseas have many considerations before hiring employees in a new country. Employment laws and statutory benefits vary from country to country, so it’s important to familiarize your team before you start hiring new talent or sending U.S. employees to a new country to begin operations. Here are some key considerations when hiring abroad:
Your Company Could be in Violation of Local Laws Without Realizing It
From working hours and wages to termination, many employers don’t understand their legal responsibilities due to inexperience or lack of research. As an employer, you need to know what constitutes a potential breach of in-country labor laws and potential repercussions that could arise from a violation. Awareness is the key to making sound hiring and termination decisions. Staying ahead of local labor requirements will help avoid fines and penalties for your organization.
Local In-Country Employment Laws Differ from U.S. Labor Law
Starting up in a new country can be daunting considering labor laws differ from the U.S. labor code. Employers that will be bringing U.S. employees to a new country to work must be aware of labor laws related to employing foreign nationals. Once your U.S. employee begins work in a new country, labor and employment laws specific to expatriates including minimum wage, working hours, benefits, and taxes will be required. It is important to understand how using expats vs. in-country talent will affect your HR practices.
Employment Laws Change Frequently
There are more than 30,000 labor law and regulatory changes around the world each year. Staying current with local employment laws in each country is challenging, and laws can change rapidly. You need a trusted source for HR compliance to provide updated information related to labor laws, regulations, and documents like employee agreements so you can ensure you meet the requirements in each country. Many companies use in-country attorneys or compliance experts who specialize in employment law to make sure the company is following the proper requirements in each country.
Hiring and working in a new country provides great opportunities and unique challenges for organizations. Familiarizing your team with the local in-country laws will save resources and reduce risk for fines due to non-compliance. As labor codes vary by country, and sometimes by region, it can be impossible to keep track of every change each year.
Compliance Challenges with Global Expansion
When you are expanding into new countries and managing employees in the U.S., there is often a disconnect between payroll and compliance requirements. As you expand into new countries, the complexity can grow and put your company at risk for non-compliance. One of my clients recently found themselves in the same situation, with employees in the U.S. and Canada and plans to expand into Mexico. They needed help getting payroll up and running and wanted to make sure they had the right compliance measures in place.
My client had already registered their business entity in Mexico, but payroll wasn’t set up. They were adding additional employees very quickly in Mexico so there was a time pressure for their team. Their process in Canada was not running smoothly, as they had communication issues with their in-country provider and no timely reporting. They were using Paylocity for their U.S. payroll and wanted a new solution that would integrate their U.S. and global payroll as well as their global HR.
One of their biggest challenges with payroll was the lack of reporting and insight into their employee data. They were using different systems in the U.S. and Canada and did not want to start payroll in Mexico unless they solved their current problems with Canada. Using Paylocity for the U.S. and Blue Marble for Canada and Mexico, they now have single-sign-on access to payroll and aggregated reporting in real-time across all three countries and currencies.
Their other concern was international compliance in Canada and Mexico. They weren’t sure how to ensure compliance and had service issues with their in-country provider in Canada. Blue Marble has a global consulting team to help identify in-country requirements and ensure compliance in each country. Blue Marble also provides a dedicated U.S.-based service team to help with in-country payroll questions. My client was confident that their Canada and Mexico payroll would now be compliant with in-country regulations.
With integrated U.S. and global payroll, my client is now able to view employee data in real-time, create aggregated reporting, and ensure compliance across multiple countries. With single-sign-on their payroll is easier to manage and they have dedicated in-country experts to help when questions come up. READ MORE