Payroll is one of the most crucial and critical functions of any business. But like any core business process, it comes with a unique set of challenges.
That statement is especially true if you’re one of the 25% businesses still executing your company’s payroll manually. A manual approach to payroll is not only cumbersome, but also poses the biggest threat of human error. The issue of security is also critical here, as payroll involves sensitive information. In fact, 90% of all data breaches are a result of human error.
For businesses throughout the UK and Ireland, where employment laws and payroll legislation are regularly updated, manual payroll processes become even more complex. Evolving guidelines mean new training and procedures need to be implemented, which brings with it an increased chance of human error, slow processing speeds, and overall inefficiency.
Fortunately, for businesses running their operations on Oracle E-Business Suite (EBS), there are options. And they all start with introducing automation to streamline your processes and minimise risk.
Here’s a breakdown of some of the new employment laws and payroll legislation that may affect your current payroll operations—and how Velocity Technology Solutions’ Oracle EBS expertise can help you navigate those changes.
Payroll Change #1: The new UK "Good Work Plan" Legislation
What it is: As part of the “Good Work Plan” legislation, which recently went into effect on 6 April 2020, certain categories of employees have a new legal right to holiday pay. The actual rates of the pay vary per person, and they’re determined by a formula that’s applied to an employee’s previous qualifying earnings. This introduces another layer of complex manual inputs during payroll processing.
The Velocity Solution: One of our customers struggled with the tedious tasks associated with this new legislation. First, they had to manually review an employee’s 52 weeks of previous qualifying earnings. Then, they had to manually calculate the correct holiday pay entitlement for the employee, while adding this final number to the employee’s final payroll. The process easily took hours just for a single employee. And during high-volume payroll processing periods, it was a stressful and overwhelming task.
Velocity provided a solution that would automatically calculate and pay the correct holiday pay for any employee covered by the new legislation. The new functionality is triggered when the payroll users give a specific element entry to an employee, indicating that the employee is taking a number of their allocated annual leave days. With Velocity’s solution, when the payroll is run, a new formula attached to the annual leave element entry will fire, and will pass details of the employee to the new custom program. The custom program will then analyse the employee's earnings history, and return the correct calculated holiday pay amount to the employee’s payroll results.
This entire process takes less than a second to calculate and apply the correct holiday pay rate during payroll processing.
Payroll Change #2: The Irish Government Funded Illness Benefits
What it is: As part of the Illness Benefits in Ireland, organisations in Ireland have to recover social welfare payments for sickness absences during payroll processing (paid directly to employees by the government) outside of Oracle EBS-operated payroll. This creates a lot of hassle for the payroll team, who typically has to manage the payments of thousands of employees. That’s because this change requires them to manually evaluate every single employee’s sickness absence pattern to determine which days qualified for the recovery of social welfare payments.
The Velocity solution: One of our customers in Ireland didn’t want their payroll team to continue manually evaluating every employee’s sickness absence patterns to determine which days qualified for the recovery of Social Welfare payments. It required a considerable amount of time and effort, and oftentimes was prone to human error due to the sheer volume of employees they had to calculate.
Consider this scenario: During the Coronavirus pandemic, a company might be dealing with as many as 1,000 manual calculations. Suddenly, that business might receive a further batch from the Irish Government that needs to be implemented. This will have an impact on their daily tasks, and it could cause serious errors and processing delays. It could easily take more than 20 minutes for each employee’s calculation.
The Velocity solution was to automatically evaluate an employee’s sickness absence patterns and recover the correct Social Welfare payments based on an analysis. The solution Velocity designed and delivered works as follows:
A custom formula fires for each sickness date recorded against the employee.
The custom formula calls a custom package, passing details of the employee to the custom package.
The custom package examines the current sickness date in relation to the overall sickness pattern for that employee. This examination of the absence pattern is to determine where this particular date fits into the overall absence pattern.
Based on the overall absence pattern and legislative rules, the custom package will return one of the following results:
The absence date will be flagged as a “Waiting Day” and no recovery amount will be applied to the payroll results for this day.
The absence date will be ignored completely because it is a day that does not qualify for sickness benefit (e.g. a Sunday).
The absence date will be identified as a date on which the employee has already received a government benefit, in which case the recovery amount is calculated and applied to the employee’s payroll results as a deduction.
The process takes less than a second to identify all absence dates. Then, the recovery amount is automatically applied to the employee’s payroll deductions.
Are you tired of your manual payroll processes? We have an experienced team supporting Oracle E-Business Suite, and they have the expertise and knowledge needed to create a unique payroll solution that works for you.
If you’re interested in automating your own payroll processes in Oracle E-Business Suite, tune into our on-demand webinar: “How To Automate Payroll Processes in Your Oracle E-Business Suite.”