Understanding how HR relates to legislative business concerns is far too often overlooked by executives. HR needs to play an integral role in the legal side of the business, or companies stand to suffer fines and other legal penalties.
"Local legislation evolves constantly, and this plays a big role in business," says CEO of CRS Technologies, James McKerrell. "Companies need to know and understand how HR fits into legislation, as reporting incorrectly could, for instance, lead to a huge fine."
Sage HR & Payroll MD Anton van Heerden says it's especially important for local companies to have a grip on the ever-changing legal landscape. "In SA, law and tax play in a dynamic environment. Since 1994, new laws are constantly coming into play and existing laws are frequently updated," he says.
Paying on time, for example, is a critical function in any company, and there can be legal implications if a business does not adhere to this. "Not to mention the many facets of labour law and employment equity," he says.
Payroll fraud
According to Van Heerden, payroll fraud is one of the biggest risks facing companies, with losses bigger than those of cash-in-transit heists. "The worst part about payroll fraud is cases often go unreported by the business, due to embarrassment. Instead of laying a charge against the guilty party, they're simply let go. Without prosecution, the fraudster will go to another company and do the same there, creating a vicious cycle."
By implementing certain features into an existing payroll system, the risk of fraud can be reduced significantly.
Van Heerden suggests the following:
* Access control: Controlling who can access what, and restricting what certain users can do on a particular system.
* ID verifications online: Checking against the Home Affairs database to ensure IDs are legitimate.
* Bank account verification: Verifying bank account details to ensure account number and account holder match.
* Direct link to banking system: Instead of imputing an electronic file into the banking system, a direct link to the banking system can be implemented, ensuring no files can be tampered with en route.
"Despite legislation being promulgated, it's not being adhered to," McKerrell reminds us. "Features built in to HR and payroll software can go a long way in helping a company comply."
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