The Role Of Compliance For University Like Cambridge

Introduction

University of Cambridge central administration team is responsible for services to confederation of academic and affiliated institutions together forming University Group. The only exceptions are 31 Cambridge colleges that are self governed. Employee benefits package is delivered via close partnership of human resources (HR), payroll and pensions team. This complex level of services shadowing constantly changing set of compliance legislation starts at HR primarily taking care of University Terms and Conditions of employment; linking to payroll responsible for academics to be paid accurately and timely, ensuring pay is processed in line with both current employment legislation and Equality Act 2010. Pensioners, students and occasional academic workers pay processing also falls under central payroll umbrella of care.

Cambridge payroll evolved to reflect growing complexity, impact of global business and increased statutory regulations. Seven payroll officers at forefront embraced a high-tech approach in payroll obligations. Limited human input and double authorization advocates Cambridge payroll software in its integration and automated function as leader in lowering chances of human error. It also explains why biggest challenge in payroll compliance is staying on top of current legislation. This report seeks to understand why compliance is extremely important in both types of contractual agreements: assistant and research. It will specifically review the core set up driven by corporate and legal obligations. In addition it aims to formulate recommendations for existing and proposed law scrutiny aiming beyond compliance now and after Brexit.

Prospective starters

Applicants screening start with Disclosure and Barring Service check for all prospective joiners (domestic and from outside of UK). That HR activity in line with university safeguarding policy following “An employer’s guide to right to work checks” agrees with Fraz (2015) theory of “strong policies from the start. ” Providing applicants with relevant information minimises risk of employing wrong people and saves issues in long term, as Corehr (no date) warns on “cases going wrong. ” Elevated cost highlights researchers working overseas that may require enhanced level of government vetting, where International Child Protection Certificate may be obtained. In long term that protects compliance with university principle of non-discrimination and equality correlated and forming an integral part of international human rights law and Jus Cogens. Equal opportunity advocated by Durojaye & Owoey (2017) is crucial for Cambridge worldwide reputation, because "in order to cultivate a set of leaders with legitimacy in the eyes of the citizenry, it is necessary that the path to leadership be visibly open to talented and qualified individuals of every race and ethnicity". Employment Right Act 1996 provides that: "No worker shall be treated in a discriminatory manner by his employer in his employment or occupation. " Cambridge aim is to promote meritocracy. Furthermore, the Act prohibits prospective employers to discriminate in recruitment, which explains why Cambridge job adverts don’t mention any ‘manager, handyman, salesgirl’ making it open to both sexes. Removing protected characteristics, advocated by Equality Human Rights from Cambridge application pack linked anti-discrimination laws and benefited university employee relations encouraging participation from diverse backgrounds. Cambridge Payroll Manager (PM) forms part in ongoing consultation under the Lisbon Treaty on employment of EU citizens for Brexit transitional phase (29 March 2019 to 31 December 2020) strongly opposing EU directives greatly affecting employee rights across educational economy, already voiced by Trades Union Congress and pledged for protection by the Prime Minister Theresa May after UK has left the European Union Cambridge can’t afford any fundamental rights breaches exposing University to penalties. Past cases have shown the Supreme Court has been very limitative in granting monetary compensations, warning Cambridge payroll in UK of unlimited compensation, following the ruling of the ECJ (European Court of Justice) in the Marshall Case.

Slapper and Kelly (2011) argue “court action is not always the most appropriate means of resolving a dispute”. Pre-employment checks may consume time and increase cost for international research workers, but clearly protect and guard university reputation, which agrees with Brazier warning “if an employer fails to do so before employment commences, the employer will have no defence to civil or, in the worst cases, criminal penalties and sanctions. ” That relatively new proactive payroll venture justifies checking of visiting academics, securing university position from few angles:

• by defining exactly which country / taxation residency and national insurance obligation is to be met in case there is pay due, preventing any possible liability issues / penalties,
• by defining what academic knowledge and performance can be shared under the visiting agreement it improves employee and union relations,
• saves time and cost in instances of statutory appointments (Board of Examinations) / certain honorary positions (Head of Department) attracting wider range of multinational applicants to Cambridge.

Drafting the contractIn line with ERA contract of employment is issued for all university staff within eight weeks of the start date. The written document is a comprehensive legally binding paper with terms and conditions (T&C’s) of employment apart from addressing payroll-related matters in clear and concise manner (pay date, frequency and pay method), going much further into benefits and bonuses, NMW and WTR, employing and dismissing practices (part time, fixed term, term time), as well as processing and paying other elements like pensions, leaves and holidays for example. Contractual terms are well linked to university policy information sources available on University website.

Biggest difference in contract terms surfaces with researchers. Specific T&C’s are drafted carefully for each established academic appointment. University has to secure ownership of ‘know – how’ advocated by Hiscox (nd) and inventive technologies incubated, mothered and published/patented in Cambridge. It is Cambridge international reputation that is at stake. Naming and shaming claim could potentially fall headlong collapsing Cambridge international mark and status quo. On the other side advocated by Europa. eu challenges of “one-sided compliance with obligations” advocate for Cambridge rising number of highly qualified HR and Payroll professionals guarding issuing and underwriting of employment terms. Payroll Manager (PM) rose with HR consultation into holiday calculation and expression in contract recognising risk of “employer being found in breach of contract” advocated by Citizens Advice Bureau. Seven HR School Teams centrally supported by payroll comfortably manage issuing of contracts after selection checklist approval that filters into ‘Contracts to be attached’ report for payroll to action.

Contract attachment

‘Contracts ’ report can be forced anytime from live data. Payroll actions ‘Contracts’ daily to ensure all HR data input is captured. Any unapproved starter received in HR after payroll contract locking is automatically moved into next pay period timeline. Both payroll and HR deadlines are on university website communicated well in advance of academic year. Sensible and realistic practices of deadlines demonstrate fundamental set up process filters well into payroll processing cycle, voicing CIPD theory that “internal communication is important for developing trust within an organisation and is shown to have significant impact on employee engagement, organisational culture and ultimately productivity”.

‘Contracts’ report includes protected TUPE employees transferring in, for whom any liability information is processed under HR scrutiny with parts 2 and 3 of P45 certificate delivered to payroll office. Payroll action concentrates on assigning correct national insurance category, tax code and student loan based on the declaration received, pension scheme and bank details validation feeding into automated FPS (full payment submission) submitting data to HMRC fulfilling all regulatory obligations. Payroll actions demonstrated in third-party reconciliation audited parallel to FPS ensure deductions to pensions, unions, CMSS etc. are correctly executed. That allows Payroll manager to satisfy all internal and external customers keeping payroll “brand ahead of competitors”, as advocated by Medium Corporation. In case Cambridge payroll failed to deduct payments due to a public authority, strike actions, overpayments or court orders, or accepted any other voluntary deductions without employee authority it could be fined up to £1, 000 or taken to court, warn Croner-i. All union related matters (new deductions, changes and ceased instructions) are examined against authority received (monthly union subscription deduction sheets).

Part of payroll checklist process also ensures union representation leaves is recorded under strict scrutiny. Payroll checks of pro-rated pay elements for any part time and fixed term employees demonstrate good knowledge corresponding with change of hours; any fluctuations of holiday, training leave, sickness absence, maternity, pension, redundancies, TUPE T&C. Payroll validation checking justifies application of Immigration Act 2016 with appropriate comments preventing “biggest threat in compliance violation” advocated by Entrepreneur. All RTW expiry and termination cases in Cambridge are equally subjected to notice period mirroring resignations, retirements, redundancies or sensitive cases like death in service demonstrating application of ACAS (Advisory, Conciliation and Arbitration Service) code of practice. Redundancy pay is carefully checked against continuous two years of service. Statutory aspect of reporting compliance varies in retirements. For assistants (CPS pension) P45 is issued directly to the employee, for researchers (USS pension) parts 2 and 3 of P45 are passed internally to pensions dept with employee receiving part 1A only. Special exemption reports demonstrate cases of fixed-term maternities offered for renewal, statutory pay checking like maternity entitlement against 26 weeks up to and into the Qualifying Week (QW), SMP1 and MATB1 approvals or leave pay (kit days, parental, time off for dependants up to the 5th birthday, family crisis, holiday pay before or after maternity taken). Exemption checks from income tax (NT notices) and social security (A1 and deferment certificates) for visiting academics where tax clearance has to be obtained prior to employment (Chinese visiting researches double taxation agreement) minimises risk of non-compliance.

Application of Children and Families Act 2014 in payroll employment relations across all university demonstrates university leave policy is not only well linked, but most importantly executed providing clear guidance on various types of generous paid/unpaid leave for all employees regardless of the length of service, salary or working equivalent (hours). Most importantly payroll compliance checklist for starters ensures T&C’s are linked with legislation particulars executed at the set up stages. Leave taken continues to be logged by HR after contracts are locked. Payroll team performs only one independent check of leave pay deducted at the start of monthly payroll cycle. Clearly the biggest risk visible is after contracts are locked, where payroll must ensure late leavers final holiday and overtime is captured. The best improvement to the current process must be second set of checks after contracts are locked. Specific payroll tasks (retrospection, net pay differences, starters, leavers, transfers etc. ) re-run after contracts are locked for processing, would directly benefit payroll ensuring all under and over payments are correctly caught. Level of service and contractual reportingIn order to meet payroll compliance objectives payroll software preserves the best way of ensuring university stays within the bounds of the law. Any changes affecting NMW and WTR posing risk as advocated by Duncan Lewis Solicitors do not miss PM scrutiny. Audit trail enables payroll team to check and distinguish genuine human errors from potential fraudulent attempts, which agrees with Davies (2011) advocating that “it is essential to evaluate the accuracy and credibility of sources of information “. It serves as useful tool to examine every change that has been made to employee information affecting pay, focused on catching and minimising risk of fraud, advocated by Garrett (2013). Crucially it also displays the responsible processing/authorizing details; making is extremely useful in protecting payroll.

On a larger scale it also protects corporate reputation in case of government investigation, voiced internationally by Global Investigations, where the necessary link between each transaction has to be validated against supporting information. Cognos reporting tools make payroll technology always accessible and immune to time auditing at each stage of processing. That proactive function enables prevention well in advance of submission deadlines. Auto enrolment process is well supported with Midland software relation ensuring it’s up-to-date and compliant. There is number of assurance checks in payroll compliance overview (American payroll, nd) managed by Cambridge Team Leaders through the payroll cycle. Escalation via human resources and pensions link give evidence the more information payroll have to review, there is more chance of getting things right the first time. Although modern management practices in global Cambridge are wisely looking towards robust multinational workforce management, there is a risk in letting payroll compliance take a back seat.

Payroll software shouldn’t be an addition connected to accounting system, it should be a separate system designed for tailored needs. The risk of compliance failures and employment practice liability has risen significantly since 2014. Mistakes advocated by Payroll blog can lead to non-compliance. Mullins (2010) highlights how organisations are becoming more aware of the need for corporate responsibility. The proactive approach of payroll management proves failures can be avoided with a careful advance planning and constant checks into changes advocated by CIPD like employers national insurance (NI) liability and termination payments (PILON’s) above the £30, 000 to class 1A NICs implemented in a NI Contributions Bill published 2018, taking effect from 6 April 2019. On the other hand Cambridge payroll software is built to accommodate the GDPR, data collection requirements / storage regulations in tax year period in UK only, which could possibly be the risk area. The answer could be investing heavily in interoperability. Leading HR leaders warn it already is the biggest cost driver of information technology. Having UIS (University Information System) in house designing new software could be potential option. Cost and time could be minimised by pool of talented developers, jointly responsible for compliance challenges becoming increasingly critical to the university. Cambridge auditors Deloitte warn of issues published by Gretczko and Proctor where unique challenges arise in increased risk and regulatory requirement not only on national scale, but significantly complicate the process of multinational compliance. In Cambridge the financial risk is imminent in research cases on social security compliance. Cambridge university situation mirrors 75 percent of the EY 2015 survey respondents facing increased “risks and regulatory requirements” in multinational compliance relating to immigration, taxation and social security areas for staff on international assignment. The biggest impact on employee relations is finding the best way of paying correct social security contributions owed.

In Cambridge at the moment that obligation is met by completely manual process with no supporting technology. That obviously significantly increases PM area of responsibility. Looking into the technology to support systems for social security compliance is a must to resolve that issue.

Conclusion

Staying compliant definitely is challenging for University like Cambridge. In multinational labour force and researchers coming from all parts of the world, abiding with legislation enables Cambridge work force to be paid and treated fairly, but most importantly to prove payroll compliance is not a burden. Interlinked processing and communication between central sections clearly surfaces as most important objective executing application of ERA (1996) – biggest overhaul of employment law.

Recommendation

Payroll system design should give maximum flexibility so that radical changes can be more easily accommodated. Payroll professionals must keep up to date with employment policies. Membership of the CIPP is needed to ensure first source knowledge on employment related policies and the implementation process.