The end of 2021 is quickly approaching. As with 2020, COVID-related policies and regulations impacted payroll and HR in 2021, adding some additional year-end considerations. To help payroll and HR departments navigate year-end obligations, AccuPay has created the following “to-do” list.
PAYROLL AND TAX
Review CARES ACT and ARPA Provisions for Employee Retention Credits. Under the CARES Act and American Rescue Plan Act (ARPA), eligible employers were able to claim tax credits for paying qualified wages to employees they retained on their payroll during the pandemic. The recently signed infrastructure bill ended this provision retroactively to September 30, 2021; however, employers should review prior quarters beginning March 13, 2020, to see if they may amend forms 941 to claim these lucrative credits. See AccuPay’s blog for more information on Employee Retention Tax Credits.
Review YTD Payroll Balances. Audit any payroll balances for policies that are calendar year based for any carry-over practices, reminders, and any negative balances to address.
Review Deferred Tax Responsibilities Under the CARES Act. If you took advantage of the CARES Act’s employer Social Security tax deferral for 2020, you must pay the first 50 percent of your deferred taxes by Dec. 31, 2021. The remaining 50 percent is due Dec. 31, 2022. If you are an AccuPay you should have already communicated your preference for repayment to your Payroll Specialist. See our previous PayDay regarding deferred FICA.
Review Payroll Records to make sure any COVID-related sick and family leave hours were recorded correctly. The Families First Act and later the American Rescue Plan Act, included provisions for employers to reduce 941 tax due by wages and employer tax paid for time off related to COVID-19. These wages must be identified on form W-2, so speak to your Payroll Specialist if any of these wages were not reported correctly in payroll.
Review Mandates under President Biden’s COVID Plan. In September, President Biden announced a new COVID-19 strategy which OSHA will implement through an Emergency Temporary Standard (ETS). Key mandates in the plan include:
- Employers with 100+ Employees to Ensure their Workers are Vaccinated or Tested Weekly
- Vaccinations for Contractors that Do Business with the Federal Government
- Vaccinations for Health Care Workers at Medicare and Medicaid Participating Hospitals and Other Health Care Settings.
- Employers to Provide Paid Time Off to Get Vaccinated
Some of these requirements have been challenged by multiple court cases, and OSHA has recently announced a suspension of the ETS. If you are required to comply with the mandate, be sure to stay apprised on ongoing developments, and have a plan in place for compliance.
Review Expanded EEO Laws for Discrimination during the COVID-19 pandemic. The Equal Employment Opportunity Commission (EEOC) updated and expanded guidance regarding federal Equal Employment Opportunity laws to help employees and employers understand their rights and responsibilities at work during the pandemic.
Review the Laws in the City and State Where Employees are Working. In addition to federal laws, employers must also follow the state laws where their employees work – a compliance challenge, especially for multi-state employers. While not all state labor laws apply to every business, employers should be familiar with the laws that do and understand the requirements of each law. Most states and localities have websites with up to date withholding tax information. Contact your Payroll Specialist for assistance when an employee is working in a new state or local. Be sure to notify your accountant too, as additional business filings may be required.
Update Workplace Labor Posters and Notices. Requirements for posting labor posters differ by state, such as EEOC notices about employment rights, FLSA minimum wage posters, and OSHA notices about workplace safety. If there are any updates to the posters in your operating states, you will want to update your wall posters or electronic posters to remote employees. Contact your Payroll Specialist if you would like more information on how AccuPay may help you stay in compliance.
Review All Insurance Policies including Workers’ Comp. Contact your insurance broker to determine if you need to adjust your liabilities to cover additional exposure. Also, check with your Workers’ Compensation broker to determine if any changes in your work environment or staff work assignments may affect your exposure and codes currently on your account.
Prepare and Distribute Annual Compliance Notices. Each year, your business may be required to distribute certain compliance notices to employees. Examples include a Summary of Benefits and Coverage (SBC), privacy practices on personal health information (HIPPA), the Children’s Health Insurance Program Reauthorization Act on health coverage assistance (CHIPRA), Women’s Health and Cancer Rights Act (WHCRA), and COBRA General Rights and Elections notices. Your retirement plan may also require annual notices to employees such as a Safe Harbor notices, annual fee disclosures, or SIMPLE IRA annual notices.
Check All Required Compliance Training. Check all federal, state, and industry workplace training requirements that apply to your business, as well as workplace training mandated in your state. For example, many states require COVID-19 workplace safety training and best practices for sexual harassment training. However, if COVID-19 training is not required in your state, employers should consider workplace training consistent with OSHA and CDC guidelines.
Audit FTEs for ACA Compliance. An Applicable Large Employer (ALE) is an employer with 50 or more full-time and FTE employees. Under the Affordable Care Act (ACA), an ALE must offer health coverage and meet certain annual reporting requirements.
To determine if your business is an ALE and must comply with ACA in 2022, audit your FTEs for each month of 2021 to determine if you have reached or exceeded 50 full-time and/or full-time equivalent employees. ALEs that fail to provide full-time workers with minimum essential coverage that meets the affordability threshold are subject to two different penalties, which the IRS refers to as shared-responsibility payments. Contact us at firstname.lastname@example.org with any questions.
Audit FTEs for FMLA Compliance. Audit your FTEs to determine if you have reached or exceeded 50 employees and are required to comply with the Family Medical Leave Act (FMLA) in 2022. Employers covered by the FMLA are obligated to provide their employees with certain important FMLA notices, so both employees and the employer have a shared understanding of the terms of the FMLA leave. Note that FMLA compliance requirements are different from ACA compliance.
Review 2022 Health Plans Against New Affordability Thresholds. Review your employee health plan to make sure it satisfies the Affordable Care Act (ACA) affordability threshold requirements. The affordability threshold is the highest percentage of household income an employee must pay for monthly health insurance plan premiums, based on the least expensive employer-sponsored plan offered that meets the minimum essential coverage requirements required under the ACA. The IRS lowered the 2022 employer health plan affordability threshold, or cost-sharing limit, to 9.61% of an employee’s income. The threshold in 2021 was 9.83%.
Enhance Your Employee Benefits Package. A competitive benefits package is key to keeping and attracting top talent. Assess your current benefits package and consider making necessary adjustments to include options, such as expanded mental health support, for example.
Review Employee Records. The fourth quarter is a good time to review your employee records and check record retention guidelines. Don’t forget to dispose of outdated termination and outdated job applications properly. With W2s around the corner, make sure all addresses, social secruity numbers, and information are updated.
Develop and Distribute Your 2022 Calendar. Create and distribute a calendar outlining important dates, vacation time, pay dates, and company-observed holidays for 2022.
Review and Update Employee Handbook. Review your employee handbook to make sure it is up-to-date and addresses areas, such as employment law mandates, new COVID-related policies, guidelines for remote working, privacy policies, compensation and performance reviews, social media policies, attendance, and time-off, break periods, benefits, and procedures for termination, discipline, workplace safety, and emergency procedures.
AccuPay is here to help you navigate through all your year-end “to-do’s.” Be sure to download our Year End Guide for specific information that AccuPay will need to complete your year-end reporting and W-2’s accurately. If you are interested in learning more about AccuPay’s HR services, contact us at email@example.com.
This PayDay is for educational purposes only and does not constitute tax and/or legal advice. Any links to external resources are for educational purposes only. AccuPay is not affiliated with nor receives any renumeration from any outside sources. Please consult with your tax and/or legal advisor before applying any suggestions made here or through external links.