December HR To Do List

It’s been a long year of constant changes and adjustments for everyone this year. 2020 is finally coming to an end, and 2021 is just around the corner…ready and waiting for a fresh start. Before taking some well-deserved time off with your loved ones (stay socially distant!), be sure to get these items done to ensure a smooth year-end:

• Update employee contact information. This is a great time to ask for updates from everyone who forgot to tell you that they moved across town last February…or that they moved to a new state since everyone is now remote. W2’s will need to be mailed in January, and you want them to get directly to employees without getting lost in the mail. (And if you have an employee in another state, you’ll need to be sure you’re registered as an employer in that state ASAP!
• Give employees the opportunity to update their federal withholdings via the W4 form. Many payroll companies allow employees to log into the system and adjust this amount themselves – if you have this ability, remind employees of what they can do on their own by logging into the system (pro tip: many systems also allow address updates to be completed by employees!)
• Have you started analyzing your YTD turnover rates overall and by department?
• Audit your Full-Time Equivalents (FTEs) and review employee classifications. Are they correctly classified as exempt (salaried) or non-exempt (hourly?)
• Audit that payroll! Hopefully you’ve been maintaining excellent payroll records all year, but if not, now is the time to clean them up. Clean records will make your year-end reporting much simpler and save you time and money. Make sure you’re prepared for any special instructions given by your payroll provider for year-end. Many providers will make a Year-End Webinar available to you or send you other special instructions. Pay attention and be sure you’re prepared!
• Many payroll providers will automatically generate W2’s for employees, but they need accurate information to do so. Reprinting them, even if only digitally, will result in extra charges from most payroll providers, so be sure the information in your system is accurate before reports are run.
• Work with your Accounting team to be sure all contractors have been identified for easy 1099 production.
• If applicable, begin planning for submission of your ACA-1095 forms.
• Send information to employees about adjusting their 401(k) contributions for 2021. Some employees may have contributed the maximum earlier in the year and will forget to start contributing again in the new year; others will contribute the same amount each pay period in order to maximize their contribution by year-end. Still others will want to contribute for the first time this year! Make sure everyone knows how to begin contributing in January, and if you need to input their changes manually, make sure you set the deadline for changes so you still have time to implement them. The maximum contribution for 2021 401(k) plans is $19,500, with an additional “catch up” amount of $6,500 for employees who are over age 50.
• Does your company have a Flexible Spending Plan (FSA)? Many plans require employees to re-enroll in their FSA plans for 2021. Again, if you’re implementing changes manually, make sure your deadline for employees leaves you enough time to implement the changes. Send a reminder to employees that any receipts they want to reimburse for this year’s plan must be dated in 2020! Also remind them of the deadline for submitting those receipts…many plans allow employees to submit receipts for the previous calendar year as late as March. Be sure you know the deadline imposed by your plan and you communicate it to plan participants. 

• With the new year starting, make sure to update, review, and audit your internal and external HR and recruiting websites.
• Review labor law updates for 2021. A lot has changed during this year and you want to make sure your company complies. 

• Be sure you and your management team are clear on winter work policies and paid holidays, then distribute them to employees. When is a snow day? How will employees be informed if the office needs to close? Conversely, are there no special policies? Is the office closed on December 24, 25, or 31? What about January 1? Does your industry require people to work on any of these usual holidays? If so, do they receive “Holiday Pay” that day? Communicate with employees in advance to avoid surprises.
• Do you normally have a Company Holiday Party? How is that handled this year with the stay at home order in place? Perhaps a festive Zoom call or a Remote Secret Santa?

The Holidays might be a little quiet this year. Encourage employees to comply with county and/or state orders regarding holiday gatherings. Take advantage of this time to relax, focus on yourself and your immediate family, and end the year on a high note!