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Guide to Business Continuity Planning in Payroll

In the best of times, the payroll department can seem somewhat invisible to the rest of the organization. That’s not necessarily a bad thing: It means everyone is being paid on schedule and there aren’t any noticeable technical hiccups. And, when a major disruption does occur, the essential value of payroll becomes obvious. Any delay in payments can jeopardize significant company operations.

Preventing these sorts of incidents requires proper continuity planning. For example, what happens when payroll teams have to operate mainly from their homes, relying on collaboration software for messaging, audio and video? This has become the normal state of affairs at many companies in the COVID-19 world.

Even under these challenging circumstances, payroll professionals must still provide essential services, which they can more easily do with a structured continuity plan in place. Let’s look at what such a plan should include.

The essential components of a business continuity plan for payroll

At a basic level, a business continuity plan should cover the following areas:

Governance and organizational structure

The plan should describe the roles, responsibilities and accountabilities related to all payroll operations. Basically, it should detail what activities should be performed, by whom, in what sequence, and at which locations.

Critical payroll employees should be given the authority to make decisions during a crisis, without having to navigate an overly complex decision-making chain. On a related note, service priorities must be well-defined, so that there isn’t any confusion about which applications and systems should receive the most attention.

IT infrastructure and technological considerations

Payroll disruptions can happen for many reasons, including downtime of critical IT systems. A business continuity plan for payroll should describe some of the possible threats to and vulnerabilities in the company’s technical infrastructure.

Specific steps should be outlined for responding to situations such as platform unavailability, addressing critical questions that may arise in such circumstances. For example, are there any backup and/or remote platforms (e.g., in the cloud) that teams can access in an emergency? Where are they located? And are there any other mechanisms like virtual private network (VPN) licenses that need to be set up in advance or procured on the spot?

Risk assessments

Beyond just the possibility of technical mishaps, continuity plans should also account for other risks, both internal and external, such as:

  • Public health and safety crises
  • Limitations on travel and transportation
  • Problems with vendors
  • Supply chain breakdowns
  • Regulatory and legal changes

Assessing these risks and others will require relevant electronic and/or paper-based documentation, which should be in an easy-to-follow format. Using graphical aides and elements, such as charts and tables, is preferable to text alone.

Remote work and staffing

As we have all experienced this year, the COVID-19 pandemic has made telecommuting a necessity in many organizations virtually overnight. This unprecedented situation created serious continuity challenges for some companies related to system access, security and compliance in particular.

Continuity planning should spell out all requirements for safe and productive remote work in payroll. Key workflows such as producing payments and transmitting deposit files should be regularly tested. It’s important to ensure that access to critical assets, like payment and general ledgers files, is dependable and that sufficient staff is available during a crisis.

Planners should also provide guidance to payroll members on what systems to access and how to do so. Cloud-based platforms with self-service capabilities are particularly useful in this context, as they can be reliably and securely accessed from almost anywhere with an internet connection.

The same detailed review should be made for all your mission-critical vendors to confirm how you will still receive the products and services you require if something were to happen to normal business operations.

Tax and pay statement content

Between disruptions to on-site processes and the need to resort to contingency plans, a crisis may limit your company’s ability to deliver timely, accurate pay and tax statements to employees. This is where offering cloud-based access to employees for this information takes on greater importance.

CIC Plus can help you make sure employees have consistent access to custom payroll information from anywhere. We can also connect you with partners capable of helping with other aspects of payroll continuity.

Navigating challenges in payroll continuity

No matter how comprehensive a payroll continuity plan is, you can and likely will still run into significant operational hurdles in executing it. The COVID-19 outbreak is an unfortunate reminder of the need to focus on remote operations, self-service and the employee experience in particular when maintaining continuity in payroll.

In the early days of the pandemic, IT research firm Gartner highlighted how the sudden shift to remote work placed unprecedented pressure on VPN usage and wide area network bandwidth, both of which are critical pieces of the remote employee experience. The state government of New Jersey also emphasized some of the new cybersecurity liabilities created by increased remote access – highlighting the ever-tricky balancing act between security and convenience.

Overcoming these problems requires the right combination of people, tools and processes:

  • People: Set up a manageable chain of command and empower decision-makers in both payroll and HR to provide remote support and also direct employees to relevant resources. Have members from other departments contribute to the continuity plan, too.
  • Tools: Set up a secure online portal for accessing payroll assets and check if employees have the hardware and software they need to comfortably work from home.
  • Processes: Establish protocols related to tasks such as disaster recovery, payroll schedules, the release of bank payments, and employee access to payroll data and pay statements, among other activities.

One final piece worth mentioning is maintaining continuous regulatory compliance, even amid all the other actions, is necessary when responding to a disaster. Statutes such as the federal Fair Labor Standards Act plus many state and local laws still apply despite the new complications created by COVID-19, as Bloomberg Tax has explained at length.

However, the complexity of these regulations means that professional assistance is often necessary to get all the right policy and compliance forms in place. The CIC Plus Compliance Library addresses your state compliance need.  Because the CIC Plus team is always staying current on the latest development in HR and payroll, we can quickly implement and distribute any required forms, such as ones for paid sick leave.

Learn more about the Compliance Library here, or reach out to one of our team members for additional guidance on how we can contribute to your continuity planning.