Superyacht crew payroll solutions
Article by ONBOARD Magazine
CREW PAYROLL SOLUTIONS
Without doubt one of the most important considerations for the average working person is to be sure that they are paid in accordance with their employment contract
The world of payroll solutions continues to develop with more and more emphasis on Apps and the provision of real time information and these solutions are in plentiful supply, however are they just a fancy frontage to an empty store?
The increasing global co-operation on matters such as anti-money laundering (AML) and countering the financing of terrorism (CFT) has thrown a few more subjects into the equation recently and all this on top of the changes to banking contained within the Payment Services Directive PSD2 which was approved by the EU in 2015.
All these changes have had and continue to have, a major impact upon the payment of salaries, across borders in particular. Whilst designed primarily to protect individuals and banks they have created many challenges along the way and it is important, therefore, that any payroll solution takes full account of the legislation.
We have since PSD2 in particular seen an impact upon bank charges and how they are levied and in many ways this can be entirely random depending upon which route a payment takes from the sender’s bank account to the recipient’s bank account. So two people who may earn the same amount and live in the same country can feasibly be hit by differing bank charges depending upon the type of bank account that they have.
PSD2 goes hand in hand with the AML/CFT regulations because they are both about knowing where the money is coming from and where it is going to in varying degrees. This has had a specific impact upon payroll only solutions where the payroll is processed by a bureau i.e. a company separate to the employer.
In order to pay an individual, not only does the payer have to have appropriate due diligence on the client who is sending the payroll funding to them, they also need to know who it is going to.
An employer holds sufficient information to know who the payee is but in a payroll only situation it is incumbent upon the payer to identify the individual to the extent they can verify their identity in accordance with AML/CFT legislation.
SO WHAT DOES THIS MEAN IN REALITY?
A payroll solution has to deliver the following:
• An ability to process a payroll efficiently which includes making calculations for any tax and social security liabilities that may be due somewhere.
• An ability to link to a payment system which is able to satisfy the requirements of PSD2 whilst reducing the impact of bank charges on both the sender and the recipient.
• An ability to handle, both receive and send, multiple currencies.
• An ability to identify the sender of funds and where those funds originated from.
• An ability to verify the individual to whom those funds are being sent.
• An ability to maintain ongoing monitoring of the sender/recipient of funds.
• An ability to produce online payslips.
• And of course must be compliant with MLC 2006 where appropriate.
• The provision of an App for use by individual employees/recipients of payments is actually ‘a nice to have’.
There are no short cuts and these changes are not the result of Brexit or any other recent change.
The legislation has been in place for many years in most cases, it is now simply the case that the honeymoon period is almost over and it is only a matter of months before the rules have to be applied without exception.
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