The beginning of a new year typically provides the opportunity to start anew and develop better habits. As a business owner, it’s also a great time to take stock of your accounting and human resources (HR) policies and practices to ensure they’re up to date.
Specifically, here are eight items to consider heading into 2021 so you can keep your HR function, and your business, running smoothly.
Stay Updated: Ongoing HR-Related Legislation
2021 may prove to be the start of employment law changes that you’ll want to stay current on. Consider signing up for alerts about employment practice changes through the U.S. Department of Labor (DOL), Equal Employment Opportunity Commission (EEOC) and your local Chamber of Commerce. These agencies and groups are excellent resources for staying in the know on HR matters.
Changes in Required Employment Posters
In 2020, some midyear changes were made to poster regulations related to Covid-19, but they go away in 2021. To review yearly changes, or to access and print new posters at no charge, visit the websites of the major agencies involved with enforcement. These include your state’s department of labor, the EEOC, the DOL, the Occupational Health and Safety Administration and U.S. Citizenship and Immigration Services.
Update Payroll Data
Employees who have selected “exempt” on their federal Form W-4 or the state equivalent should complete a new form to confirm this status for 2021.
Update Employee Handbook
Review your existing policies to verify compliance with federal and state laws. In particular, check overtime and discrimination policies, and review any COVID-19 policies that should end on Dec. 31, 2020.
Review and Audit HR Files
The start of the year is also a good time to review your HR files as well as policies on how you handle and store employee data. You want to be sure that documents containing sensitive personal information, such as I-9 forms, employee medical files and personnel files are stored securely, and that any electronic data storage is secure. You may also want to conduct an audit of your HR records.
Use New Form 1099-NEC for 2020
Beginning with the 2020 tax year, the Internal Revenue Service will require business taxpayers to report nonemployee compensation on the new Form 1099-NEC instead of Form 1099-MISC. These forms are due to the individuals who received nonemployee compensation of $600 or more from your company before Feb, 1, 2021.
Make Minimum Wage Changes
Although Georgia (where I work) hasn’t increased its minimum wage scheduled for 2021, you might have employees in other states where this is occurring. Check with your accountant or payroll provider to verify that your company is in compliance with minimum-wage standards.
Develop Best Practices for Emerging Issues
The likelihood of the pandemic continuing into 2021 appears to be high. If you’re like most employers, you’ve likely set up policies related to remote work, sick leave and more related to COVID-19. This is an ideal time to consider how those policies could be modified to fit another type of business-impacting issue, like a flu outbreak or an extended business closure due to weather or environmental issues.
To keep your business healthy, it’s important to review and update your HR policies and practices annually. Doing so will not only benefit you as a business owner, but also your employees and your bottom line.