Is your company done with your compliance checklist?
Now that 2022 is coming to an end, companies are gearing up for the start of a brand-new year by making growth forecasts, expenses projection, and sizing up the human resources needed, among many other pertinent things.
The beginning of the year is high time for regulatory compliance. For the most part, various new regulations about employment and other related policies usually take effect at the beginning of the year. A complete compliance checklist is what you need to religiously attend to as you welcome the new year with cautious optimism.
Payroll and Taxes Compliance Checklist
As the year comes to a close, is your company fully compliant regarding taxes and payroll? Here is a straightforward compliance checklist that you can go over to double-check:
1. Employee Information Verification
Be sure to double-check your employees’ correct addresses so as not to create wastage and experience delays in the mailing and delivery of their W-2 forms.
You also have to ensure that you have updated the information of employees who resigned from your company this year.
2. Verify the W-2 Forms.
Verify all social security numbers files and your corresponding federal employer identification number (FEIN). Avoid being penalized by the IRS for each W-2 returned containing inaccurate information. Moreover, keep in mind to include any taxable cash or non-cash benefits your employees receive.
Your company tech stack should be able to help you with this. Or, if you do not have one just yet, consider making a secure online portal that allows your workers to retrieve their W-2s and check stubs. This will streamline the process and also help reduce paper wastage.
Human Resources (HR) Compliance Checklist
A company HR compliance checklist is an excellent way to ensure that your company complies with all applicable federal, state, and local regulations. Compliance policies have deadlines, and HR must remember these dates each year.
Before welcoming the new year, make sure that your company has done the following on or before the onset of the Christmas and new year festivities:
1. Filing W-2s
Your company should provide W-2 forms to your employees on or before January 31 of each year. This is a top priority so your employees can file their state and federal taxes on time.
Remember that the Social Security Administration should have received a copy of your employees’ W-2 on or before the January 31 cutoff.
2. Reporting of the Affordable Care Act (ACA)
March 2, 2023 is the deadline for employers from large companies to furnish Form 1095-C to their employees. On the other hand, paper Forms 1094-C and 1095-C with the IRS have been set to March 31, 2023, for electronic filings or February 28, 2023, if your company is filing physical forms.
This cornerstone Act, also known as Obamacare, is crucial for your employees, so filing this on time should be one of your HR’s non-negotiables.
3. EEO – 1 Reporting
Some employers also need to submit a report on demographic workforce data. These include information on race or ethnicity, sex, and job categories. According to the Equal Employment Opportunity Commission, the yearly collection of data will begin again in April 2023.
Pertinent Documents Needed for Tax Filings
Here’s a compliance checklist for all required documents you will need for tax filings.
1. CARES Act Employee Retention Credit
Are you one of those companies that fully compensated their employees during the height of the pandemic? If yes, you may be eligible for a tax credit through the CARES Act.
Companies have three years to review wages paid after March 12, 2020, to determine eligibility. Salaries paid from March 13 through December 31, 2020, deemed eligible may claim credit of up to 50 percent of $10,000 in yearly wages paid by employers affected by the pandemic.
Meanwhile, for qualified wages paid from January 1 through September 30, 2021, credit as high as 70 percent of $10,000 in wages paid per quarter is available.
2. FUTA and FICA Forms
The Federal Unemployment Tax Act must be reported, and the corresponding tax liability settled. If your FUTA tax liability is more than $500, your company must make at least one quarterly payment. However, if it is below $500, you may carry it forward onto the next quarter.
Similarly, social security and Medicare taxes, also known as the FICA, must be settled promptly.
On top of all these, conducting an Employee Salary and Benefits review is vital as you usher in 2023. This is also because new regulations will directly impact your employees’ salaries and your company’s ability to attract and retain top talent.
Regulatory Changes That Employers Must Know
Here’s a compliance checklist for everything you need to know to stay ahead of the curve as an employer.
1. Pay Transparency
States with large workforce populations, such as California, New York, and Colorado, have started implementing a Pay Transparency Law that mandates companies to announce pay ranges in their job posts.
The same law also requires companies in these states to publicize their pay data. These include the total number of employees broken down according to race, ethnicity, sex, and the pay band that each employee falls under. For each category, companies must also include median hourly rates for each combination of race, ethnicity, and sex.
Altogether, the Pay Transparency Law wants to establish greater equality, inclusion, and diversity in the workforce.
2. Leaves/Paid Time Off
The state of California, for example, enacted two changes on this matter.
AB 1041 amends the California Family Rights Act, which provides employers with up to twelve weeks of leave to take care of a family member. Taking effect by January 1, 2023, Assembly Bill 1041 expands the coverage of eligible employees to take a break to care for individuals who are not family members.
The expansion now includes a designated person. This refers to any individual related by blood or whose association with the employee equals that of a family relationship. The employee may identify their designated person once they file for a leave. As an employer, you may have the right to limit your employees to only one designated person within twelve months.
3. Consumer Data Privacy (Biometrics) Act
Several US states, such as Illinois, California, New York, and Washington, have taken the liberty to protect their consumers by regulating how companies obtain biometric information and how they use this information which is highly unique for each individual.
The California Consumer Privacy Act, in particular, mandates limited obligations on employers concerning how they process their employees’ data. Aside from employees, the act also includes job applicants, the C-suite, and independent contractors.
Under the law, employers based in California are mandated to provide these individuals with a privacy notice explaining the kind of data being collected and the purpose behind the collection.
The act aims to champion and safeguard data privacy to minimize the possibility of fraud and data abuse.
If doing all these changes feels a bit dizzying to you as an employer or a hiring manager, make sure to stay ahead of these regulations by hopping on a call with Fox Search Group this December to discuss how to welcome 2023 with confidence and ease insofar as these new regulations are concerned. A highly reputable staffing firm committed to providing your company with top talent, let Fox Search Group give you guidance and insight on all the new regulatory compliance you need to know and so much more. Connect with us today!