2021 Year-End Payroll & HR Checklist

As we come to the end of another tumultuous year, it is time to reflect on our successes and challenges and look ahead to 2022. To help you wrap up the end of the year smoothly, we've put together a checklist containing essential payroll items. 

Payroll

• Confirm the 2021 payroll schedule.
• Prepare for the first payroll run of the year. 
• Meet with your payroll team and determine their needs, expectations, and anything they're worried about going into the new year. 
• Make sure your payroll team is prepared and has the tools necessary to perform duties. 

Benefits

• Calculate your FTE number to determine if you are an Applicable Large Employer (ALE with 50+ full-time equivalent employees) in 2021.
• If you are an ALE: Prepare for ACA reporting requirements.
• Modify summary plan descriptions (if there are changes) and distribute them to new participants. If no changes, distribute every 5-10 years or annually if any updates include:
   
  • Notice of special enrollment rights
  • Qualifying events (including the two marketplace exchange events)
  • Wellness program disclosure
  • Medical child support order written procedures are in place
    
    
• Consider a wrap plan document when a certificate of insurance or plan document doesn't contain all of the required eligibility rules and federal notice language that is needed.
• Ensure elections are correctly loaded with plan carriers.
• Life insurance audit to identify any elections requiring evidence of insurability.
• Send Medicare Part D, HIPAA, CHIRPA notices.
• Other Compensation, Employee Business Expense Reimbursements, Taxable Fringe Benefits, Third-Party Sick Pay, Tip Allocation Information, and Dependent Care Benefits.

HR

• Review budget and allocations for accuracy to prevent overspending.
• Schedule any remaining performance reviews.
• Review and update all company policies.
• Remind employees to update their personal information for benefits cards, tax documents, etc. Ensure that they review the following for accuracy:
   
  • Home address/mailing address
  • Phone number
  • The beneficiary for life insurance
  • Name change
  • Emergency contacts
  • Dependent information

Compliance and Credits

• Double-check your employee classifications. This IRS Classification checklist is fantastic.
• Update all internal resources for an employee handbook and company policies.
• Issue updated employee handbook to employees.
• Verify that labor law posters are current and displayed correctly.
• Verify employee information. Check that all information is correct on file, including SSN and FEIN. The IRS may penalize you for any incorrect or missing SSN or names.
• Update tax forms W-2, W-3, prepare filing for 1096 and 1099 MISC forms.
• Review healthcare deadlines and filing requirements
• Review FMLA guidelines
• OSHA form 300A
• Review and update forms for the following to ensure you are compliant and getting all tax credits: 
  
  
  • CARES Act
  • WOTC
  • FFCRA tax credit
  • Forms 1094-C and 1095-C ACA reporting requirements
  • 1099-NEC
  • FFCRA tax credits

Checklist for Proliant Customers

If you're a Proliant customer, we make it easy for you to get through the year-end checklist without breaking a sweat. You can count on our payroll and tax experts to ensure you are compliant and receive all due tax credits. Also, all essential employee data is already in your system and ready to go. Here is a checklist to help make everything go smoothly into the holidays.

Double-check key information.

• Make sure your company's information is up-to-date. Verify that you've entered a tax ID in payroll for every state where your employees live or work, for instance.
  
  
• Make sure your employees' personal information (name, address, SSN, etc.) is correct. The IRS may impose penalties for incorrect or missing information.
  
  
• Make sure your employees' payroll data is correct. Double-check that their earnings and deductions total up to the amount you expect and that you haven't forgotten to account for any manual or voided checks. The W-2 validation preview should help you with this.
  
  
• Run a comprehensive report for the year on sample employees with particular circumstances as a check against the W2 Preview:
   
  • An executive
  • An employee with different resident and work states (Location)
  • An employee who moved during the year
  • An employee who had adjustments during the year to correct prior pay periods
  • An employee who was promoted mid-year
  • An employee who worked multiple locations
    
    
• Verify that your employee names and Social Security Numbers (SSN) match Social Security's records. Choose one of these options for verification:
   
  • Verify up to 10 names and SSNs online and receive immediate results.
  • Submit an XLS file with your list of employees to the Social Security Number Verification Service.
  • If you have a request of more than 10 employees, use the file format linked here.

Communicate special circumstances.

• Many companies experience special circumstances in their payroll that affect their reporting. If you're a Proliant customer, we have you covered—just let your dedicated Account Manager know if any of these apply to your company 2-3 weeks before January 1st: 
  
  
  • Pay runs outside the system
  • Disability payments or third-party sick pay
  • Tips
  • Fringe benefits
  • Tax modifications
  • Employee taxed in the wrong state
  • Stock option events
  • Non-qualified deferred compensation (NQDC) plans

Run payroll at the right time.

Banks will be closed on December 25th and January 1st. Pay run deadlines in Proliant update automatically, but you may still need to run on a different day of the week than usual. 

• Based on your check date, run payroll with your specific processing time in mind (one day, four days, etc.). The same goes for any bonus payrolls you'd like to pay with a 2021 check date. 

Proliant is here to help.