[UK] £130m payroll blunder reminds HR to stay vigilant

HR professionals have been warned to remain vigilant about their payrolls following a Christmas Day blunder in which a bank mistakenly paid out £130m from business accounts, People Management reports.

According to BBC reporting, a technical error by Santander led to around 75,000 accounts receiving an unexpected payment including some duplicate salary payments.

Santander said that the mistake had not left any business customers out of pocket but Samantha Johnson - policy lead at the Chartered Institute of Payroll Professionals (CIPP) - said it will have caused stress and worry for many payroll teams.

“Payroll professionals look to their banking providers to deposit wages to employees, and technical errors such as this can create havoc for payroll teams who will no doubt have received an onslaught of queries from employees who were affected,” Ms Johnson said.

She said CIPP research suggests many people do not regularly check their payslips and urged people to get into the habit of doing so in order to catch errors early.

“In addition to encouraging payroll checks within the department, the CIPP also encourages everyone to get into the habit of regularly checking their payslips to identify mistakes like this quickly, before it becomes a bigger problem,” Ms Johnson said.

Claire Williams - chief people officer at CIPHR - said that manual payroll errors can be avoided if employers focus on upskilling HR and payroll teams and ensure that watertight processes are put in place, “Have a clear and defined segregation of duties, with appropriate levels of checks along the way… If you are using a payroll bureau or managed service, make the most of technical integrations to avoid further risks of manual errors”.

Although mistakes made by banks are outside payroll managers’ control, Ms Williams said they should provide employees with clear information and avoid setting inaccurate expectations to reassure staff.

“Make some early decisions as a business as to how you might handle various outcomes,” she said. “For example, would you be willing to provide bridging loans to employees who are worse off in the short term, as a result of the bank's error?

“Ultimately, you can’t completely remove risks of error, but should constantly work and refine your payroll processes to minimise this wherever possible.”

A Santander spokesperson told the BBC that the payments were made as a result of a quickly rectified scheduling error and that the recipients of the mistaken payments may have included employees and corporate suppliers.

The spokesperson said that the mistaken payment was funded by Santander’s own reserves and that the bank was in talks with rival banks - reportedly including Barclays, HSBC, NatWest, Co-operative Bank and Virgin Money - to determine the best way of reclaiming the money, some of which had already been returned.

This process could prove difficult, however, if some of the recipients of mispayments have already spent the money. Rival banks will be unlikely to return lost money if doing so pushes customers into their overdrafts.

Source: People Management

(Quotes via original reporting)

HR professionals have been warned to remain vigilant about their payrolls following a Christmas Day blunder in which a bank mistakenly paid out £130m from business accounts, People Management reports.

According to BBC reporting, a technical error by Santander led to around 75,000 accounts receiving an unexpected payment including some duplicate salary payments.

Santander said that the mistake had not left any business customers out of pocket but Samantha Johnson - policy lead at the Chartered Institute of Payroll Professionals (CIPP) - said it will have caused stress and worry for many payroll teams.

“Payroll professionals look to their banking providers to deposit wages to employees, and technical errors such as this can create havoc for payroll teams who will no doubt have received an onslaught of queries from employees who were affected,” Ms Johnson said.

She said CIPP research suggests many people do not regularly check their payslips and urged people to get into the habit of doing so in order to catch errors early.

“In addition to encouraging payroll checks within the department, the CIPP also encourages everyone to get into the habit of regularly checking their payslips to identify mistakes like this quickly, before it becomes a bigger problem,” Ms Johnson said.

Claire Williams - chief people officer at CIPHR - said that manual payroll errors can be avoided if employers focus on upskilling HR and payroll teams and ensure that watertight processes are put in place, “Have a clear and defined segregation of duties, with appropriate levels of checks along the way… If you are using a payroll bureau or managed service, make the most of technical integrations to avoid further risks of manual errors”.

Although mistakes made by banks are outside payroll managers’ control, Ms Williams said they should provide employees with clear information and avoid setting inaccurate expectations to reassure staff.

“Make some early decisions as a business as to how you might handle various outcomes,” she said. “For example, would you be willing to provide bridging loans to employees who are worse off in the short term, as a result of the bank's error?

“Ultimately, you can’t completely remove risks of error, but should constantly work and refine your payroll processes to minimise this wherever possible.”

A Santander spokesperson told the BBC that the payments were made as a result of a quickly rectified scheduling error and that the recipients of the mistaken payments may have included employees and corporate suppliers.

The spokesperson said that the mistaken payment was funded by Santander’s own reserves and that the bank was in talks with rival banks - reportedly including Barclays, HSBC, NatWest, Co-operative Bank and Virgin Money - to determine the best way of reclaiming the money, some of which had already been returned.

This process could prove difficult, however, if some of the recipients of mispayments have already spent the money. Rival banks will be unlikely to return lost money if doing so pushes customers into their overdrafts.

Source: People Management

(Quotes via original reporting)