Pay mistakes

91 per cent of companies get staff pay wrong amid furlough confusion.

New research by MHR International, has found that frequent changes to government Covid-19 employment support rules has severely disrupted HR and payroll departments, with the result that 91 per cent made pay errors every month over the last year. The survey of 250 HR and payroll managers in the UK and Ireland also found that almost all businesses (94 per cent) have run into problems processing payroll.

Nearly half of the businesses surveyed (46 per cent) said that their HR and payroll employees had to work extra hours to process changes to furlough or employment wage subsidy schemes. A third (33 per cent) said the amount of payroll errors has increased and 37 per cent said the complications distract them from other business-critical tasks.

“Payroll and HR teams have shouldered a heavy burden during the pandemic, with changes imposed at the drop of a hat,” said Anton Roe, CEO, MHR. “These have required extensive knowledge of rules about furlough and employment support, National Insurance, pensions, holiday entitlements and employment status. These teams need as much support as possible from employers to increase efficiency and avoid delayed or incorrect pay. Having good payroll software in place will not only significantly improve errors made, it will reduce the pressure on these hard-working teams.”

Parallel research by MHR International of over 1,000 employees in the UK and Ireland also reveals the damaging impact of payroll mistakes on personal lives. Nearly two-thirds (65 per cent) of workers affected by errors or late payment said they have had to borrow from friends or family or use high-cost loans or credit cards to get by. Of those paid incorrectly, 71 per cent said it has happened as many as three times in the last 12 months.

“Regular payroll mistakes not only damage employee morale but will also impact retention and place unnecessary stress on workers,” added Roe. “Businesses making errors that result in failure to meet National Minimum Wage requirements could also receive fines and penalties.”

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