Payroll and Its Risks for a Company

Many companies view payroll as part of the accounting function, although in reality it is a distinct activity based on a different legal framework, serving different objectives and involving different types of risks. In smaller companies, payroll often encompasses HR and employment-law responsibilities as well. However, the most important difference between accounting and payroll is that while accounting errors typically result in administrative issues that can be corrected relatively easily, payroll mistakes can fundamentally undermine employee trust—the very foundation of a company's operations.

What does the principle of “equal pay for equal work” mean?

Since the 1970s, human rights movements and organisations have taken a clear stance and implemented measures to combat wage discrimination. As a result, improvements were noticeable for a long time; however, this process has slowed over the past decade, and since then the average gender pay gap within the European Union has no longer decreased significantly. For this reason, the European Parliament and the Council have set out concrete measures. One of the key instruments is pay transparency, as well as the practical implementation of the principle of “equal pay for equal work.