Staying Globally Compliant Can Avoid Costs That Add Up

Compliance in global payroll, while complex, can bring a return on the investment required through sustainable business growth and more predictable financial circumstances, two practitioners said May 16.

Basic reasons why compliance can be so complex include each country’s own requirements, the amount of content in languages besides English, and the varying scopes of services and expertise offered by payroll providers, said Deborah Piacitelli, CPP, global payroll director for Zimmer Biomet Inc. The costs of noncompliance can include operational disruption, financial exposure through fines and penalties, legal action such as lawsuits and audits, and reputational damage, she said.

Mokscha Haack, senior payroll specialist for Zimmer Biomet Polska Sp. z o.o., gave some examples of penalties for overdue social tax payments, starting with Germany’s 12% interest per year. “It doesn’t look like much, but if you’re paying 1 million euros, roughly 1 million [US] dollars per month to social security, that’s still a lot of money,” he said. France and South Africa are examples of countries that assess immediate penalties on the first day after a payment is due plus interest, while Spain increases the penalty after one month, he said. Penalties in other countries can include fines and prison sentences, he said.

Piacitelli and Haack spoke at the 2025 Payroll Congress in Kissimmee, Fla.

Haack cited some statistics from the provider Strada’s 2024 Company Payroll Complexity Report, including that a majority of responding employers operating in multiple countries had received a noncompliance penalty in the past five years, compared to only 24% of employers operating in one country.

Even laws not related to payroll taxes can result in fines, Haack said, citing examples of France handing out fines for noncompliance with the reduction of its workweek to 35 from 39 hours in 2001, as well as the European Union’s General Data Protection Regulation, noncompliance with which can result in fines of up to 4% of global revenue.

Piacitelli mentioned that enough workers in Europe go on vacation in the summer that “you really have to be thinking forward” about deadlines and make sure everything is ready three to four months in advance. She also recommended learning the rules about benefits in kind in different countries and “understand what you’re giving out in each country when there’s lunch meetings and when you’re bringing everybody in.”

Compliance can never be fully outsourced because the business is ultimately responsible for breaches, Haack said. Payments are always accountable to local laws no matter from what department of a business they come from, he said.

Businesses can also use compliance as a competitive advantage, Piacitelli said, because staying compliant reduces the chance of unpredictable financial obligations such as penalties or corrections and can help the business better prepare for audits. Compliance can tie directly into financial planning and risk management, making it crucial for sustainable growth, she said.

Piacitelli recommended assessing compliance risks on a per-country basis and investing in the highest-risk areas. She told attendees to make sure they can “tell your story” of a compliance risk, i.e., what its possible repercussions are.

The presenters outlined a risk map as a year-round document that can help organize compliance incidents and trace how they happened, who was impacted, and the result of the incident.

Haack encouraged cost-effective compliance through free resources, including agency websites, payroll associations, and professional networks. He recommended that businesses use tools already available to them, including everything a vendor offers. He advised attendees to do due diligence on vendors and only use reputable vendors and software.

Finally, Haack told attendees to learn continuously and keep up with regulatory trends such as pay transparency and data protection. “If you keep learning about changes in the payroll industry and you make sure that your team also keeps learning, then you will be better equipped to spot changes,” he said.