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19th November 2017

What impact will Brexit have on UK payroll?

Many employment and payroll changes related to Brexit remain unknown, but in the next 1-2 years, companies will have to adjust how they manage employees in the UK and ensure compliance with potential new regulations.

One of the biggest impacts of Brexit for employers will be managing payroll data. Currently, companies with employees around the EU have the same payroll requirements and regulations regardless of the country they reside in. Once Brexit is implemented, companies will now have to differentiate UK regulations and EU regulations, and manage the potentially different data protection standards currently in place.

Another aspect of Brexit that could positively affect payroll management in the UK is the implementation and administration of employment laws. Some current laws in place, such as TUPE, the EU Directive to ensure workers retain employment rights as they transfer to new employers, and the EU Working Time Directive are extremely time-consuming to administer and cause burdens on employers to ensure compliance. Once Brexit is implemented, there could potentially be a huge administration and cost savings for employers. The UK will potentially make changes to these laws to simplify administration. Other employee protections will most likely remain unchanged.

With much uncertainty about the timing and implementation of any payroll or employment law changes due to Brexit, companies must adhere to the current laws in place. Staying up to date on the most recent legislation related to Brexit can help employers ensure compliance and prepare for any changes.

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