The end of the year is a good time for employers to check their taxes, benefits and payroll information to be certain they’re in compliance with the latest laws and regulations.
I’ve talked to colleagues in Human Resources who agree it’s a good idea for employers to do a thorough review of taxes and payroll at the end of the year. It’s also a good time to go through group health insurance plans and other benefits offered by the company to see whether any changes are needed.
Employers should pay close attention to several areas.
- The past year has been another difficult year with hiring challenges. Is your staffing appropriate? Is the company complying with any mandated training? Is your employee compensation competitive for the 2022 labor market?
- Is your employee handbook up to date? All new and updated policies should be included and communicated to employees. With changes in the work environment, pay attention to updated policies pertaining to remote work and COVID-19 precautions, including mask wearing and social distancing.
Prepare for employee performance reviews and begin setting goals for 2022.
Make sure you contact your retirement plan representative for a financial review and work with the vendor to bring a representative into your company to talk to employees.
Not all businesses will need an HR compliance audit, but it is something to consider.
The end-of-year review reminds business owners of things they can be doing, not only for themselves, but also for their employees.
I prepared an employer checklist based on my own experience, information from the Society for Human Resource Management (SHRM) and conversations with Paychex, ConnectPay, a benefits broker and some bookkeepers. Follow the checklist below for things that should be done by the first of the year.
Taxes and Payroll
- Verify employee information: Validate employee addresses and check to make sure the status of employees who have left the company has been updated.
- Doublecheck W-2 forms, including Social Security numbers and federal employer identification numbers. If your company doesn’t already have a secure online portal, you might consider setting one up so your employees can access their paycheck stubs and W-2s. It may reduce labor and paper waste and increase security.
- Prepare documents needed for tax filings:
- CARES Act retention credit: The credit was created to support employers who paid their employees throughout the pandemic. For companies affected by COVID-19, it includes up to 50 percent of $10,000 in wages annually paid from March 13 to Dec. 31, 2020, and 70 percent of $10,000 in wages, per quarter, paid from Jan. 1 to Dec. 31, 2021.
- Families First Coronavirus Response Act (FFCRA) tax credit: This tax credit refunds employers for qualifying wages covering sick and family leave paid to employees affected by COVID-19.
- Note the filing deadlines for FICA and FUTA payroll tax forms.
- IRS Payroll Tax Holiday: Payments are due Dec. 31 for companies that chose to defer Social Security payroll taxes.
- Affordable Care Act (ACA): Companies are required to distribute 1095-C forms to applicable employees.
- Independent Contractors: Make sure independent contractors receive the correct statements for their taxes. As of 2020, the amounts must be reported on form 1099-NEC.
- Review plans and health insurance policies
- Group health plans: Review group health insurance plans and renew them if the renewal is due.
- Affordable Care Act (ACA): Review the provisions for compliance with the Employer Shared Responsibility (ESR) and IRS 2021 Employer Health Plan Affordability Threshold change stipulations.
- Open enrollment: Prepare notifications for employees and schedule informational meetings.
- Flexible Spending Account plans: If your company allows employees to set aside pre-tax money for medical or dependent care expenses, the plans must be set up and employees enrolled by the new year.
- FFCRA: Collect information on employees who took the paid leave during 2020 to file for the tax credit.
- Gather payroll records.
- Compensation: Review employee compensation to ascertain whether it’s competitive for the 2022 labor market.
- Year-end bonuses: Confirm your payroll provider issues checks for any year-end discretionary bonuses.
- Wage and hour updates: Make sure any local or state minimum wage increase is reflected in employees’ pay on the effective date. Also, check compliance with telework, exempt employees and hazard pay, based on Department of Labor guidance for COVID-19 and the Fair Labor Standards Act (FLSA).
- Review updates to wage base limits.
- Staffing and training: Check to ensure employees are trained and you’re complying with any mandated training.
- Create or update your company’s 2022 calendar: Required training for managers and employees might include sexual harassment prevention training, hiring practices, workplace safety and effective management. Also consider scheduling time to update managers and staff on COVID-19 protocols and compliance with guidance from the Occupational Safety and Health Administration (OSHA), the Centers for Disease Control and Prevention (CDC) and local public health officials.
- Employee Time Off: Remind employees to review any vacation, holiday, sick or other banked days for paid time off they may have left over. Provide them with their balances if your company tracks the time.
- Business continuity plan: Review your business continuity plan to be prepared for severe weather, a natural disaster or health emergency that might affect your business.
- Employee handbook: Employers should do an annual review of their employee handbook to be certain updated and new policies are included and communicated to employees.
Reflecting back on 2021, I want to thank all my clients for making this a wonderful year. I wish you all a prosperous and healthy 2022.
Reach out to me if you have any questions while reviewing your year-end checklist.
50+ Job Seekers workshops
The 50+ Job Seekers Networking Group is offering a new series of workshops that will run through June. A new series of bilingual workshops will kick off in January.
The next few workshops are:
- Tuesday, Dec. 14, 10 a.m. to noon: Networking Introductions/Career Story Interactive Workshop
- Thursday, Dec. 16, 2 to 4 p.m.: Networking Special Event with Diane Darling
- Tuesday, Dec. 28, 10 a.m. to noon: STAR/PAR Stories Interactive Workshop
- Tuesday, Jan. 4, 10 a.m. to noon: G2G (Give-to-Get)
Information on the bilingual workshops will be posted on the 50+ Job Seekers Networking Group website at https://50plusjobseekers.org as it becomes available.
The virtual doors open 15 minutes before the program starts. Pre-registration for first-time participants and advance registration is at https://50plusjobseekers.org/outreach/registration/.
Those who are already registered with the program will receive an email about the 50+ Job Seekers workshops.
The Massachusetts Library Collaborative meets from 9:30 to 11:30 a.m. the first and third Wednesdays of the month from July through December. For information on the programs, go to the 50+ Job Seekers website at https://50plusjobseekers.org/.
The remaining program for the year is a discussion of Personal Branding on Dec. 15.
If you have questions, email us at email@example.com.
Connect with me
You can contact me by downloading my digital business card by texting HRPRO to 21000 or emailing me at firstname.lastname@example.org.