With the current COVID-19 outbreak impacting business operations across the globe, reviewing your payroll continuity procedures has never been more appropriate. If you don’t currently have one, NOW is a good time to put one together. Creating a plan to address the current state of emergency will suffice, but remember to make it more versatile when the dust settles. Having some form of a plan still sets you ahead of those businesses that have no plan at all.
Your business has key individuals, they hold particular knowledge, they perform a certain function within your business. But what if? What if they couldn’t come to work? What if they couldn’t perform their tasks any more? What if “work” isn’t there any more….physically? Disasters can happen, are you prepared? Jurassic Park provides this advice as per Dr. Ian Malcolm, "God creates dinosaurs, God destroys dinosaurs. God creates Man, man destroys God. Man creates dinosaurs." Sometimes you don’t know what the future holds, but regardless, your payroll department must prevail.
Your employees need to get paid. If you don’t believe me, don’t pay them, see what happens. Good luck with your research. For those who already know employee payroll must always stay on course, having a payroll continuity procedure (PCP) is your best practice.
When preparing a payroll continuity plan, there are several possible events to consider, but try to plan as best you can. Having a dynamic plan will allow you to implement your strategy to survive any unforeseen payroll interruption, within reason of course.
All the members of your team that are involved in your PCP must understand their roles. There will be no time for decision making if your plan needs to be implemented. The chain of command, managers, assigned duties, and a backup should any of these individuals not be present. Other key individuals in other departments may also be required for processing payroll, so keep them in the loop as well. Cross training employees to perform more than one task will provide another level of certainty.
Establishing a method of communication is key. Use what ever methods are available during the event. Just remember, email and cell phones may not be available, so you may have to be creative. All employee contact details must be readily available during a crisis. Also, access to certain areas, keys, codes, pass cards, etc. may also be required. Keep these in mind when putting your plan together.
Having the proper documentation in place is another area you must focus on. You will need step by step payroll procedures that are easy to follow. Adding screen shots and pictures when necessary will make the process easier for the individual under pressure during the event. Your documentation should be organized in a way that anyone without payroll experience can follow along. Having additional copies with key employees is an extra precaution, but always remember to keep all copies in circulation up to date.
Depending on how catastrophic the event is, you must decide how long the impact will last, and prioritize the tasks that need to be completed. Some payroll functions are absolutely critical (paying employees) while others have a longer time frame or deadline (remittance payments) that become important after the payroll has been completed.
Bank timelines and fund transfers must also be factored onto your PCP. Running a successful payroll but not having the funds in the correct account and bouncing employee pay cheques or deposits won’t make you any friends. Also, completing a payroll to late in the day may impact when the funds become available in your employee’s bank accounts. Often, several key people and departments are involved when funding comes into play, so make sure they are included when creating your action plan.
An important step is to test your procedure regularly. Running through your PCP will point out the weak areas and allow you to update the plan. Having different people complete the procedure will also allow you to adapt your plan for different learning types. You may even want a step by step recording or video on top of your documentation. It will take some time to develop your PCP and work the bugs out, but it may prove to be a valuable tool in the future.
Having an effective payroll continuity procedure available can have a huge impact on the lives of your employees. Given the number of employees that live from pay cheque to pay cheque, getting money into their bank account to pay their mortgage and feed their families definitely proves that you value them as an employee.
To help you design your plan, here is a great tool provided by The Canadian Payroll Association: Payroll Continuity Best Practices Guidelines
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