2020 may be over but the aftershocks aren’t. The past year, of uncertainty and unprecedented change, has brought with it new laws and regulations to keep in mind as we kick-off 2021. We’d like to help you get off to a strong start to the New Year with our list of the most important HR laws to consider.
Covering everything from COVID-19 regulations to this year’s wonkier-than-ever tax information, we’ll make sure that your organization is compliant with new laws.
This year, there have been two big HR Laws regarding COVID-19. The Families First Coronavirus Response Act (FFCRA), passed on March 18, 2020, requiring employers to provide 14-day paid leave. The Coronavirus Aid, Relief, and Economic Security (CARES) Act was an economic stimulus bill passed on March 27, 2020. This legislation established, among other things, the Paycheck Protection Program (PPP) to help businesses cover payroll losses.
As 2020 winds down, it is important that businesses review these regulations so that they can reclaim credits and make sure that they are compliant.
Calculate Your Employee Retention Tax Credits
The CARES Act provides a retention credit to applicable employers that retained employees during the pandemic. The refundable tax credit is equal to 50 percent of qualified wages paid to employees between March 13, 2020, and December 31, 2020. Businesses that received a PPP loan are not eligible for an employee retention credit.
Review Tax Credit Provisions
FFCRA provides employers with fewer than 500 employees with funds so that they can offer paid sick leave or expanded family and medical leave for those affected by COVID-19. The federal government reimburses for costs associated with providing employees paid leave through refundable tax credits. Employers must display a poster outlining the FFCRA requirements in a location that is visible to all employees.
Offer Coverage for COVID-19 Testing
FFCRA requires group health plans to cover COVID-19 diagnostic testing without cost-sharing, co-pays, or deductibles. This requirement not only includes the cost of the test itself, but also the cost of any related office, urgent care, emergency room, or telehealth visits.
Stay Compliant with Evolving OSHA Policies
The Occupational Safety and Health Act (OSHA) isn’t exactly new— it was passed in 1970. However, it has taken on new importance in the age of COVID-19 as it stipulates that employers must provide a safe workplace that is free from known hazards. Recently, OSHA revised its enforcement policies related to COVID-19, including increasing in-person inspections and recording coronavirus cases. Make sure your policies are up to date and compliant!
Create a Safe Workplace With Required COVID-19 Training
Employers must check workplace training mandated in your state and municipality. Currently, 16 states require COVID-19 workplace safety training for employees. Even if COVID-19 training is not required in your state, you may choose to implement training consistent with OSHA guidelines for the well-being of employees.
A new year may be beginning, but you still need to file last year’s taxes. Here is the paperwork that HR must be absolutely certain to submit to the IRA before it is too late.
Prepare FICA and FUTA forms
The Federal Insurance Contributions Act (FICA) levies payroll tax on the paychecks of employees. These taxes, along with contributions from employers, fund the country’s Social Security and Medicare programs. Be aware that the FICA Form 941 is due Oct. 30, 2020 for Q3 2020 and Jan. 31, 2021 for Q4. If you plan to claim certain nonrefundable tax credits through FFCRA, note the changes on Form 941 for reporting tax liabilities. The Federal Unemployment Tax (FUTA) Form 940 is due Jan. 31, 2021. However, only employers, and not employees, pay this tax.
Warn Employees of the End of IRS the Payroll Tax Holiday
The IRS’s Notice 2020-65 allowed employers to suspend the withholding, deposit, or payment of employee Social Security payroll taxes. This payroll tax holiday applied to employees earning less than $4,000 for a biweekly pay period from September 1, 2020, but it will be wrapping up on Dec. 31, 2020. Employees (or their employers!) must repay their deferred Social Security taxes by April 30, 2021.
Prepare IRS Form 1096 for Independent Contractors
If you hired freelancers or independent contractors in 2020, your organization must file an Annual Summary and Transmittal of U.S. Information Returns (Form 1096) for each of Forms 1097, 1098, 1099, 3921, 3922, 5498, or W-2G, if filing by paper. The deadline for all forms is Jan. 31, 2021.
Prepare Tax Forms for Employees and Nonemployees
New year, old taxes! Businesses must distribute tax forms to all individuals who received payment during 2020, including wages, nonemployee compensation, dividends, royalties, and profit-sharing distributions. They must simultaneously submit copies to the Social Security Administration. Employers have until Feb. 28, 2021, to send corresponding copies to the IRS if filing by paper, March 31 if filing electronically. There is a new Form 1099-NEC, which replaces Form 1099-MISC, for reporting nonemployee compensation paid in 2020. Form 1099-NEC is due Feb. 1, 2021.
Double-Check Affordable Care Act (ACA) Requirements
If subject to the requirements of the ACA, employers must distribute a Form 1095-C to all full-time employees reporting their offer of health insurance for 2020. The deadline for this Jan 31, 2021, Then, they must submit Form 1094-C employer cover sheet, along with copies of the Form 1095-Cs by Feb. 28, 2021, if paper filing or March 31, 2021, if filing electronically.
Review 2021 Health Benefits With New Affordability Thresholds in Mind
If your organization has at least 50 full-time employees, it is an Applicable Large Employer (ALE) under the Affordable Care Act. As an ALE, you must offer at least 95% of your full-time employees “affordable” health insurance that contains “minimum essential coverage.” The ACA limits the amount an ALE can charge employees for the least-expensive self-only plan. This limit —set as a percentage of the employee’s household income — is known as the “affordability threshold.” The IRS recently raised the affordability threshold from 9.78 percent in 2020 to 9.83 percent in 2021. Therefore, your organization may need to do some reconfiguring.
Businesses need to stay on top of employee information in order to stay compliant with government regulations. Here are some important rules and deadlines to stay in front of when it comes to reporting employee information.
Audit FMLA Compliance
If you have reached or exceeded 50 full-time employees, you must comply with the Family Medical Leave Act (FMLA). This law entitles employees to 12 weeks of unpaid, job-protected leave a year. Employees may use this time to take care of an ill family member, to welcome a new child, or to recover from illness. Employers covered by FMLA must post notices so that employees are aware of their right to FMLA leave.
Submit EEO-1 Form Before Extended Deadline
A Federal contractor with more than 50 employees must file an Employment Information Report (EEO–1), also known as a Standard Form 100 annually. This form provides a demographic breakdown of the organization’s workforce by race and gender. Because of the pandemic, the Equal Employment Opportunity Commission (EEOC) announced that it would delay the collection of 2019 EEO-1 Component 1 and 2020 EEO-1 Component 1 date until March 2021.
Update Job Applications in Accordance with Expanding “Ban The Box” Laws
“Ban the Box” laws are new HR laws that prohibit employers from including the checkbox “Have you been convicted of a crime?” on job applications. Currently, 35 states and more than 150 cities and counties have passed Ban the Box laws. Make sure your job applications are in compliance with local laws.
Stay Compliant with Data Security Laws
Data security laws are on the rise, already in place in California and New York. Make sure that your employee data is protected and compliant with the law.
Bring Employee Records Up to Date to Reflect New Laws
The end of a year is a great time to review general HR functions, employee records, I-9 files, and, check record retention guidelines. Further, use this opportunity to dispose of outdated information and outdated job applications. With updated records, it will be easier to keep your workforce compliant. It is vital that HR managers stay on top of new HR laws and issues affecting the workplace.