5 Ways to Prepare for Your Best Year End EverOctober 30, 2020
The Year End season can be stressful, from W-2s and time off reporting to ACA compliance. Get our tips for preparing for a smooth year end season.
While we all eagerly wait for the calendar to flip to 2021, you’ve got your homework cut out for you. In addition to year-end tasks such as reviewing employee information and preparing for the last payroll, this year you’ll have a few new boxes to check. With things like reporting Family First Coronavirus Response Act (FFCRA) coded leave and the new Form 1099NEC, here are five ways to break down the human resources (HR) year-end tasks that lie ahead.
1. Process Payroll for Year End.
Take a look at upcoming payrolls. Did you know that January 1 falls on a Friday this year? To ensure timely deposits, report all 2020 information by 6 pm CT on Thursday, December 31.
You will also need to:
- Verify all employee information, including Form 1099s.
- Run bonus and adjustment payrolls.
- Record all third-party sick pay and benefit information.
- Process special payrolls on a separate check, such as bonuses.
2. Take extra steps for a successful open enrollment period.
Strong communication is the secret to any good open enrollment period. Have a plan, make a list, and check it twice. Review your benefits offering and communicate options to employees frequently. Schedule a kick-off meeting two to three months before the open enrollment window opens and consider any plan, rate, or carrier changes. Some items to keep an eye out for:
- Deduction codes
- Plans working correctly
- Reviewing anything else in your benefits system.
Monitor for questions by giving your employees one central place to go with any benefit-related inquiries. Now is the perfect time to record a short video since research shows that 94% of employees who viewed a video took some action after doing so. Review your W-2 and Affordable Care Act (ACA) details.
Taxes and compliance play a big role in Year End. In fact, about 57% of companies say the administrative burden posed by the ACA is their biggest issue. Take a moment and check that your ACA offer status percentages are correct each month and resolve any items that may be outstanding.
The IRS also rolled out the new Form W-4 this year, which means you may have to issue corrections. Another change in 2020 was the IRS Form 1099-NEC. The new form has a space to report non-employee compensation amounts.
You were also likely impacted by the many regulatory changes resulting from the coronavirus pandemic that you’ll also have to keep in mind. Remember to include any FFCRA leave on W-2 forms.
Note: Employers are required to provide notice to all or some of the employees, notifying them of possible eligibility for the earned income tax credit (EITC).
3. Identify a variety of printing and delivery options.
This year, more than ever, it’s important to reevaluate how you will deliver year-end documents to employees, such as W-2s, 1095-Cs, and more. To avoid unnecessary contact, encourage employees to opt in to paperless options wherever possible. Also remind employees to check that their mailing address on file is correct and devise a plan to get W-2s in employees’ hands before deadlines.
Plan to send printed copies of year-end tax documents to terminated employees, regardless of whether they have opted in to paperless options for year-end documents. Create a designated area and communicate where employees can turn with questions regarding their tax documents or how they can access these records.
4. Communicate. Communicate.
Communication issues are a major barrier to effective leadership. A Harvard Business Review article says the constant change and lack of information on those changes are huge distractions for employees. “Leaders will gain deep respect when they share as much as they know as soon as they can share it. Real explanations are always better than no explanations.”
Year End already comes with its fair share of headaches for HR professionals, but for employees, a lack of communication around what to expect can add to this stressful time of year. In 2020 especially, people might be more accustomed to a feeling of uncertainty, you can help keep your employees informed and at ease with frequent updates, like when to expect their W-2, holiday schedules, and more. You can also create opportunities for them to share with you their needs and questions.
5. Ask for feedback.
Keeping the lines of communication open is especially important for the success of new and evolving processes and programs. “Strong feedback loops strengthen relationships on the whole, making them more resilient to change or adversity,” according to Forbes. As you work to get your long list of tasks completed, consider how you might check in with your teams to get their input. With every year-end season there are things that went well and things that could be improved. Ask for feedback so you can adapt for an even smoother process next year.
Measure. Adapt. Succeed.
These are all useful steps for making the upcoming year-end season a success, but much of what you do now also sets you up for success next year — and it all starts with data. An integrated, flexible HR and payroll solution with data-gathering and reporting capabilities, such as a Year End Dashboard, can help you stay organized and shoulder a lot of the burden, from compliance to data management to analytics. Schedule a demo with a solutions expert to learn how Paylocity can help you meet all the year-end deadlines, make compliance easier, and improve communication, collaboration, efficiency, and accuracy.
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