HR warned to be vigilant after £130m payroll blunder

Businesses should also encourage staff to check their payslips after technical error by Santander led to thousands of overpayments

HR bosses have been urged to stay vigilant about their payroll after a bank mistakenly paid out £130m from business accounts on Christmas Day.

A technical error by Santander meant that around 75,000 accounts received an unexpected payment, the BBC reported, including some that received duplicate salary payments.

The bank said that none of its business customers were left out of pocket because of the blunder; however Samantha Johnson, policy lead at the Chartered Institute of Payroll Professionals (CIPP), said that the error 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,” she said.

She added that CIPP research suggests many people do not regularly check their payslips, urging 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,” said Johnson.

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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”.

While errors made by banks are outside payroll managers’ control, 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,” she added.

A Santander spokesperson told the BBC the payments were made due to a scheduling error, which was quickly rectified, and that the recipients of the mistaken payments may have included employees and corporate suppliers.

They added that the mistaken payment was funded by Santander’s own reserves, and that the bank was in talks with rival banks – which reportedly included Barclays, HSBC, NatWest, Co-operative Bank and Virgin Money – to work out the best way of reclaiming the money, some of which had already been returned.

However, the process may prove difficult if some of the recipients of the mistaken payments have already spent the money, as rival banks will be unlikely to return the lost money if it puts their customers into their overdraft.