The UK and the EU legislation
In the UK, the most high-profile recent changes include the proposed Employment Rights Bill and increases to National Insurance Contributions (NICs), along with the introduction of Statutory Neonatal Care Pay, and reforms to Statutory Sick Pay legislation. While most organisations consider these processes to be relatively straightforward to implement and comply with, there are still further regulatory changes to come imminently – and the regulatory and administrative burden shouldn’t be underestimated.
The EU has been the subject of several recent and more complex payment-specific legislative updates. Perhaps, the most notable is the Payment Services Directive 3, or PSD3, which improves security and efficiency of salary payments, but may also require changes to organisational processing systems and greater collaboration with finance and IT teams.
Equally, the Consumer Credit Directive 2 (CCD2), which aims to harmonise consumer protection standards for credit agreements, will impact employers that offer financial benefits such as salary advances or workplace lending schemes. Adhering to the new regulations will require clear communication, stricter affordability assessments, and compliance with enhanced disclosure demands, ultimately increasing the regulatory burden for payroll teams.
Looking across the pond, the US is likely to see major regulatory changes in its domestic employment market in the coming years because of ongoing political upheaval. However, the current NACHA Operating Rules, which ultimately facilitate the electronic movement of money, including direct deposit of salaries across the country, are unlikely to be affected. While most employers will have adapted already, these rulings allow for faster payments, meaning payment and finance teams must be increasingly agile. They will also need to prepare for facing greater scrutiny on fraud, enhanced controls over data handling, and additional employee training.
Operating in Canada already poses potential challenges due to the varying laws and regulations in place across the country’s ten provinces and three territories. There will be further shifts in this market in the coming months, as Payments Canada announced that, in collaboration with tech firms IBM and CGI, will launch its ‘Real-Time Rail’ system for fast digital payments as soon as 2026.
This system aims to boost transaction oversight and security for Canadian individuals and businesses by allowing payments to happen in real time. Moreover, according to some commentators, this will also allow Canada to get its payments sphere up to speed with systems in neighbouring countries, as well as align its data standards with international platforms through ISO 20022.
In South Africa, the National Payment System (NPS) Framework opens the door for innovations in employee remuneration, though it may necessitate updates to existing systems and closer coordination with external financial service providers.
CloudPay’s Tech-Talent-Equilibrium Report showed that modern pay, HR, and finance leaders now favour a balance of tech and people to support continued compliance, wherever they are operating. Modern, unified platforms do this by leveraging what have become collectively known as the ‘three As’ – AI, automation, and APIs, to improve efficiency and output, as well as automate international compliance requirements. This is balanced with the skills of high-performing payroll people who use their irreplaceable human expertise and understanding of in-country specifications to oversee entire processes and provide final approvals.
John Pearce is Chief Customer Officer at CloudPay, where he leads their implementation teams, focusing on successful customer onboarding experiences. He champions the customers’ voice throughout their journeys towards the modern pay experience and supports all customers to drive the maximum potential and value from their CloudPay solutions.
CloudPay is an important player in global pay innovation, delivering industry-leading solutions spanning payroll, payments and on-demand pay. With a proud heritage of 25+ years, the organisation serves over 2,000 companies globally in more than 130 countries, handling USD 24 billion in payments in over 110 currencies. Its unified, end-to-end pay solutions enable payroll teams to pay their global workforce with outstanding accuracy and minimal risk, more efficiently than ever before.
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