For business owners and HR managers, the end of any year tends to generate an overwhelming to-do list. In light of the expansive laws governing employers that were enacted or became effective during 2016, the annual burden is particularly daunting this year. To reduce the risk of missed deadlines and other costly errors, it is crucial for employers to begin end-of-year preparations early and with a clear strategy for success.
With the dawn of 2017 on the horizon, here are some of the important steps that employers must take in order to comply with recent laws and get their workforces ready for a new year:
- Verify the requirements for health insurance under the Affordable Care Act (ACA). While offering benefits such as health insurance is an effective way for any employer to attract and retain talent, it is now required for organizations with 50 or more full-time employees—defined as those who work at least 30 hours per week, on average. In order to avoid staggering fines under the ACA, applicable large employers (ALEs) must offer health insurance that meets certain minimum requirements and is offered to all full-time employees and their dependents. Employers must provide the IRS with information about coverage offered through Forms 1095-C and 1094-C. In 2016, employers had additional time to complete these forms, but beginning in 2017, the deadline will be February 28, or March 31 if filing electronically. In light of the ACA’s requirements, employers should begin tallying the number of full-time employees that they have, assessing coverage offered, and assembling the necessary paperwork for the IRS forms before the end of 2016. Since the end of the year is open enrollment season for most insurance plans, organizations of all sizes should evaluate their options for offering employee benefits, including medical, dental, and disability insurance. If the employer wants to begin offering new benefits or make changes to existing plans, now is the time to do so.
- Review payroll information. After New Year, the bustle of the holiday season gives way to the frenzy of tax season. For employers, end-of-year payroll tasks are crucial in preparing for tax time. One of the most important steps that employers should take each year is to verify that employee information is accurate. Employers should have workers review their payroll information and complete new payroll forms if anything has changed. In particular, employees should confirm that their names, social security numbers, and addresses are correct prior to distributing W2s. The information from these forms should then be compared with the employer’s payroll records. Employers should also reconcile their payroll accounts and begin preparing to file Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return, which is due to the IRS by January 31.
- Prepare for performance reviews. Performance reviews on at least an annual basis are an integral part of talent management because they keep employees informed about expectations and equip them with the feedback they need to maximize their potential. Many organizations schedule performance reviews at the end of the year or the beginning of the new year. In the weeks preceding evaluations, managers should review their records of any feedback given to each employee over the course of the year so that their reviews are not influenced too heavily by the employee’s most recent actions. Managers should also think strategically about how employees are effective at advancing departmental and organizational goals—and how they could improve.
- Review any new local laws that have been enacted. HR laws change more frequently at the state and local levels than they do at the federal level. In recent years, a trend toward higher minimum wages and mandatory paid sick leave policies has swept many cities and states, and these requirements often become effective at the beginning of a new year. Organizations located in jurisdictions that have passed any such laws in 2016 must begin planning for how they will adjust to the resulting costs and administrative burdens. In addition, employers should ensure that their employee handbooks are updated to reflect any changes in law.
As your organization embarks on end-of-year HR preparations, consulting with the experts at CBR can help you save time and money while improving accuracy. CBR offers an easy-to-use online tool for updating employee payroll information and can provide support as employers adjust to new legal requirements. We also assist with ACA compliance and will evaluate your organization’s insurance needs to help you offer your employees competitive benefits at affordable rates. Time is of the essence as the final weeks of 2016 disappear—contact CBR today!