COVID-19 | PAYROLL ACTION PLAN
With the landscape changing daily each business will have very specific needs when it comes to dealing with their Full Time and Part Time employees. There will be directives that come from your Executive team, HR, or the business owners on how to proceed with payroll. There will be industry specific downturn or ramp up. There will be industries that can work from home, and those that clearly cannot. There will be changes to who we need to care for and how we care for our families.
There is not a solid framework to deal with the circumstances we are currently facing, so we need to work through the scenarios that come into play in line with the framework we do have. Let’s approach the situation with common sense at all times and know some payroll teams will be feeling very uncertain and under pressure. Scenarios change from day to day, and we need to acknowledge that the length of the challenge is unknown. Government support will change, as will government directives.
Unfortunately, there will be businesses who will instantaneously lose their revenue and cash flow.
Payroll has an obligation to ensure our employees are going to receive pay that will allow them to sustain paying for their essentials and bills over this uncertain period.
There are going to be MANY questions, and MANY scenarios that a payroll team will need to work through together with Managers. There will be some things payroll systems will be able to cope with, and some things they will not, with some outcomes coming down to individual direction and decision.
1) We recommend you plan payroll in 4 week cycles. It is likely for the first 4 weeks in the cycle there will be sufficient leave and entitlements around for most full time and part time employees to receive some pay from entitlements or worked hours. After 4 weeks your scenarios are definitely going to change. Be prepared for this, check where employees entitlements are at – do a % of what that looks like on full pay, or half pay – how long will their entitlements last?
2) We recommend each business build out scenario flow charts of circumstances so payroll have the details ready to go. We will be posting a link to flow charts to plan out the circumstances. This may also help with cash flow planning for finance.
3) We recommend if there is capacity in your payroll system, that payroll map out some new specific payroll codes that are going to deal with payroll transactions during this time. For example a Leave without Pay code that is Covid-19 related. It will help you look back retrospectively when things go back to normal. Even being able to tag leave as “Covid-19” will help.
4) We recommend enforcing and maintaining current required approvals and authorisations within your time and attendance, ESS/MSS, electronic forms, leave workflows and management systems. The reason being is it helps everyone stay in touch, and know what is happening in your team and where your employees are at. Also if you can, ensure there are more overriding powers for payroll to make decisions where required, if deadlines are looming. This will help take pressure off your payroll team.
5) We recommend building out a template for interim agreements that you meet with your employees that may document out of the box or a one off arrangement that changes are going to be made due to specific circumstances – that is a signed record between you and your employee. For example if you have an employee stuck overseas that can complete part of their job remotely, but not all of it, you may come to an agreement to pro-rata their salary for this period etc. Document it!
6) If your payroll is single point sensitive and there is a risk that it will not be able to be processed due to illness or technology constraints, please do reach out, we have some options available for back up support if you need it. It is imperative you have a plan in place.
7) We recommend if you are looking at standing down your employees without pay or access to entitlement, speak to your legal representative to get advice specific to your circumstance.
8) We recommend ensuring everyone is aware of their Working From Home obligations and that everyone is exercising common sense, working safely and know this is new to many people and we need to work together to get through it. Some legal advice has raised caution around a possible spike in WorkCover claims. Be proactive. Request common sense.