Employers may face a long list of financial, personnel, and regulatory wrap-up tasks as 2016 draws to a close. We asked two Paychex experts to develop checklists to help you cover some of the bases. Janelle Rodriguez, PHR, SHRM-CP, Human Resources Consultant, and Marissa Cato, SPHR, SHRM-SCP, Senior HR Generalist, offer these year-end agendas for taxes and payroll, benefits, compensation, and staffing.
Taxes and Payroll
- Ensure that all employees have current addresses in your payroll system. An invalid address could delay receipt of W-2 forms for some workers and wasted resources for your company in printing and mailing them.
- Work with your accounting professionals to gather year-end tax documents for required tax filings.
- If your firm doesn't already do so, consider establishing an online portal for employees to obtain their check stubs and W-2s, and encourage direct deposit for wages. This will minimize labor and paper waste, and increase security of sensitive information.
- If your firm offers a health insurance plan, work with your agent or vendor to execute open enrollment for employees and/or implement benefits for 2017.
- Many group insurance policies renew on Dec. 1 or Jan. 1. Review coverage plans, hold enrollment meetings with employees, and discuss the Employer Shared Responsibility provision of the Affordable Care Act — which requires companies employing the equivalent of 50 or more employees to offer affordable and adequate medical coverage.
- Gather payroll records if your workers' compensation policy mirrors the calendar year. The auditor will want to review payroll records in accordance with its policy period.
- If you plan to establish a flexible spending account, allowing employees to set aside pre-tax money for medical or dependent care expenses, your firm needs to set up the plan before the New Year.
- If your business bestows year-end discretionary bonuses, work with your payroll provider to issue the checks, either as a separate line item or in separate checks (additional bonus taxation may apply).
- If your applicable state or local minimum wage rate is increasing as of January 1, ensure the updated rate is reflected in your employees’ pay as of the effective date. You should also re-evaluate overtime rates paid to nonexempt employees who work more than 40 hours per workweek. State laws may have additional overtime requirements.
- Wage base limits for taxes start over every January 1. These include federal and state unemployment tax, Medicare, Social Security, and state employment taxes. Companies should be budgeting for the taxes they may not be paying now if employees have already met the wage base limits for 2016.
Staffing and Training
- Ensure that your company's locations will be adequately staffed during the holidays, especially if you run a retail or hospitality business.
- Looking toward the New Year, do you need to add or reduce employees? Open new locations or close poorly performing sites?
- Review staffers' vacation, holiday, sick, and paid-time-off banks and notify them about balances, especially if you have a "use it or lose it" policy (where permitted) or caps on carry over amounts.
- Assess the accuracy of record-keeping and employee scheduling functions.
- Check your company's severe weather and/or natural disaster policies, and have a business continuity plan in place in case of bad weather at year-end and through the first quarter of 2017.
- Looking ahead, consider developing a calendar of required training for managers and employees, e.g., annual or semi-annual instruction regarding hiring practices, workplace safety, preventing harassment, and effective management.
- The New Year is a great time to review your employee handbook and incorporate new policies or updates.
Preparing now can better ensure your business will run that much more smoothly at holiday time and beyond. And remember: Paychex has a wealth of resources to assist you — including assistance with regulatory compliance, payroll, human resources, and time and attendance management.