Employers faced several payroll and human resources regulatory challenges in 2020 and will do so in 2021 and beyond. Business owners and human resources departments need to become informed and plan accordingly each year.
With these key factors in mind, here are the top compliance subject challenges that both employers and HR departments need to aware of and plan for each year.
Employer Shared Responsibility Enforcement.
Employer Shared Responsibility provisions are continually growing and enforcement of it by the IRS continues to be enhanced. On top of the regulations related to IRS 226J letters, which contain the initial calculation for Employer Shared Responsibility payments mandated due to not providing sufficient reasonable insurance to regular staff, the IRS has started charging fines for delinquent or unfiled 10945-C and 1095-C returns. There have been good-faith-effort abeyances granted by the IRS for incorrect or returns that were not completed correctly, but these relief measures do not have anything to do with not filing on time and the penalties for this violation are hefty. The IRS keeps moving forward with its efforts to improve collection and enforcement. Be aware if your company is an applicable large employer every effort must be made to comply with the correct information it provides on Forms 1094-C and 1095-C and those forms must be filed on time.
The IRS continues to expand and refine its enforcement of the Employer Shared Responsibility (ESR) provisions. In addition to the IRS 226J letters, which include the preliminary calculations for ESR payments for not offering adequate affordable insurance to full-time employees, the IRS has begun assessing penalties for untimely or non-filing of the information returns 1094-C/1095-C. The good-faith-effort relief for filing inaccurate or incomplete returns was recently extended, but this relief did not apply if the returns were not filed timely and these penalties can be substantial. As the IRS continues to enhance its enforcement efforts, applicable large employers (ALEs) should ensure they do their due. Additionally, employers must be sure to answer any notice received by the IRS in a timely fashion.
Sexual Harassment Prevention
The advent of awareness of sexual harassment in the workplace has never been more prevalent since the beginning of the #MeToo movement in 2019. Due to the incredible attention brought on about this travesty, several city and state legislatures have pass laws and created regulations that require incorporating workplace rules to roll out or grow employer mandates for workplace sexual harassment prevention policies and / or workshops training employees about recognizing it and addressing it directly. All companies need to look at reviewing their own written policies and action plans to directly deal with sexual harassment and unallowed behavior at the job and developing a secure, considerate, polite workplace atmosphere for both staff and customers.
Paid Family Leave and Paid Sick Leave.
In the last 30 years several state and local governments have rolled out mandatory laws covering paid sick leave. Several states and Washington, D.C., have approved laws to institute programs covering paid family and medical leave to give certain employees who are eligible to get partial wage benefits when leaving the company to give care for a covered member of the family or ones’ self. There is a piqued interest by both political parties in the federal government regarding multiple paid leave act program proposals, with several under distinct consideration for approval right now.
In 2019 several states and counties passed paid leave laws mandating employers give paid time off to employees who are eligible that do not include the employee have to supply information why the leave is being take. Those states include Maine, Nevada, and Bernalillo County, NM.
Legalization of Marijuana
Throughout the U.S. several State and local governments have approved legislation that legalizes the use of marijuana for either medical use, recreational use, or both. In 2020, there are 14 states, plus Washington D.C. that have approved laws to make marijuana legal recreationally. That being stated, employers must develop complete knowledge about the new laws passing the legalization of marijuana, the court rulings about it and look at changing their workplace risk reduction rules and regulations to reduce the chances of marijuana use impacting the company negatively and to stay in compliance with the laws themselves regarding workplace use and the rules that are currently in place at the workplace governing drug testing.
The major challenges for employers in Payroll and Human Resources in 2020 and beyond are going to expand as our workplaces become more complex and technologically oriented. The best approach to stay in line regarding all these topics and subjects is to review each of them quarterly, check to see if there have been any new changes in the last 90 days and then make changes to your companies policies, rules and regulation compliance strategies where and when necessary.