2020 End-of-Year Compliance Checklist
This year employers faced an increased compliance burden because of the new laws and regulations passed in response to COVID-19. At the same time, they had to create new best practices and policies to navigate the new landscape of work.
Now, as the end of the year approaches, employers must continue to monitor and make decisions about the pandemic, while also observing usual year-end payroll obligations and complying with new laws going into effect on January 1.
To ensure a smooth W-2 and tax reporting season and make the end of year a little easier, please review our 2020 year-end compliance checklist.
Families First Coronavirus Response Act (FFCRA)
The FFCRA requires employers with fewer than 500 employees to provide paid sick leave and expanded FMLA leave for certain coronavirus-related reasons. Employers are reimbursed for the costs of paid leave through tax credits and should review the requirements for reimbursement.
This law is set to expire on December 31, 2020. Will Congress extend the FFCRA or pass new legislation with similar paid leave provisions? Our team will be watching closely to see what happens in Congress.
Paycheck Protection Program (PPP) Loan Forgiveness Application
Employers who received loans under the Paycheck Protection Program (PPP) should review requirements for loan forgiveness and begin preparing their loan forgiveness applications. Keep in mind there is no single deadline for submitting the application. Loan recipients must submit the loan forgiveness application within 10 months of completion of the covered period.
The Small Business Administration has already made some updates to the application process and may make additional modifications. Employers who received loans of $50,000 or less can complete a simplified forgiveness application and are exempt from loan forgiveness reductions.
Fair Labor Standards Act (FLSA) Compliance
Anthros recommends that employers review their compliance with the Fair Labor Standards Act (FLSA) on a regular basis. Are you properly tracking remote employees’ hours to ensure they are being paid for all hours worked? Have any employees’ roles or responsibilities changed during the pandemic which may affect their exemption from overtime status? With so many employers making staff changes or adjusting work schedules and policies in response to COVID-19, now is a good time to review FLSA wage standards.
OSHA Reporting Policies
This year the Occupational Safety and Health Administration (OSHA) released guidance about reporting and recording COVID-19 cases among employees. Employers should review OSHA’s guidelines about reporting workplace cases and keeping employees safe during the pandemic.
Does your employee handbook reflect your current policies and procedures, as well as changes in employment law that have been made since your last update? If you introduced COVID-19 related telecommuting policies or developed protocols for preventing the spread of infectious diseases during the pandemic, make sure these have been added to your employee handbook.
Wage Cap for Social Security Payroll Taxes
In 2021 the wage cap for Social Security payroll taxes will rise to $142,800, which means employees pay Social Security payroll taxes on earnings up to $142,800. This is an increase of $5,100 from the 2020 maximum of $137,700. There is no cap on Medicare payroll taxes.
401(k) Contribution Limits
The 401(k) contribution limit for 2021 remains the same at $19,500. The catchup contribution limit for employees over the age of 50 also remains the same at $6,500.
Changes to the Form W-4
Employers may want to remind their teams about the new Form W-4 that went into effect this year on January 1, 2020. New employees as well as employees who want to change their withholding amount must complete this new W-4. Employees who need guidance completing the new form can refer to our guide on the Anthros blog:
Did you know that more than 20 states are raising their minimum wage requirement in 2021? Review minimum wage changes in your state and order updated Labor Law Posters, if needed.
If you are an employer and the burdens of compliance and back-office human resources take you away from core business functions and growing your business, learn more about outsourcing your HR to a team of experts.
Anthros monitors compliance year-round and takes the stress out of compliance for our clients. This year, during the pandemic, our team has been working harder than ever to keep up with the constantly changing regulatory landscape and to understand how each new update out of Washington affects our clients.
If you have questions about compliance or would like to learn more about how Anthros relieves compliance burdens for employers, get in touch with our team.
About the Author
Bailey Brasol is the Compliance Manager at Anthros.