The fourth quarter is a crucial time for HR departments. From compliance checks to updating payroll to managing benefits and open enrollment, the end of the year is the Superbowl for HR workers.
In this HR compliance checklist, you’ll find key dates and deadlines, things to remember like holiday policies and employee benefits packages, and other critical tasks to close out the calendar year. Each section of the HR year end checklist provides clear tasks to streamline your year-end activities and set the stage for success in the new year.
You can download a simplified checklist at the bottom of this post!
HR Year End Checklist Outline
This HR year end checklist is broken down into the following sections:
- Key Dates and Compliance Deadlines including distribution of important forms to avoid penalties.
- Holiday and Year-End Policies including holiday time-off requests and policies for maintaining staffing levels during end of the year operations
- Legal Compliance Checks like wage laws, healthcare mandates, and leave policies.
- Employee Recordkeeping for accurate, up-to-date forms and records.
- Employee Handbook Review for ensuring and communicating accurate and updated policies
- Payroll and Taxes including verifying tax rates and new wage base limits, and confirming next year’s payroll schedule and pay period.
- Benefits and Open Enrollment to review coverage plans, the affordable care act, and retirement packages.
- FSA & Benefits Reconciliation for preventing discrepancies and ensuring timely benefits for applicable employees.
- New Year Planning to ensure compliance and policy updates reflect plans for the new year
Key Dates and Deadlines for HR Professionals: Calendar Year 2024/2025
Human resources professionals must stay on top of key dates and deadlines to avoid penalties and HR compliance issues. Marking your calendar with important dates helps prevent oversight:
- December 29 – nondiscrimination testing for fringe benefits.
- January 1 – Beneficial Ownership Information (BOI) Report due for organizations subject to the Corporate Transparency Act.
- January 31 – employers must distribute W-2s, 1099-MISC, and ACA Forms 1095-B and 1095-C to employees.
- January 31 – Forms W-2 Wage and Tax Statement and Form W-3 Transmittal of Wage and Tax Statements must be filed with the Social Security Administration
- February 1 – employers must post OSHA Form 300A to report workplace injuries and illnesses, ensuring transparency and adherence to safety regulations.
- February 10 – Annual Form 940 is due if quarterly FUTA taxes were paid on time.
- March 31 – file Form 1099s electronically for non-employee compensation.
It’s important to begin planning for these deadlines now, if you haven’t already. Many of the other year-end objectives in this checklist are dependencies for the above deadlines, so now is the time to get to work on your end of year tasks.
Being organized and proactive is key to meeting these important dates.
Holiday and Year-End Policies
As the calendar year comes to a close, managing holiday time-off requests becomes a top priority when there are numerous employees involved. Your goal is to ensure proper staffing levels while accommodating employees’ time-off needs. This is a delicate balance. Clearly communicate about company-observed holidays and holiday pay policies to prevent confusion and ensure smooth operations.
Another year-end HR activity you should be thinking about is organizing holiday parties or team events. These events boost morale, foster team spirit, and give employees a chance to unwind and celebrate their hard work. Employee gifts should be selected and purchased now to ensure timely arrival before holiday parties and events.
Compliance Check: Employment Laws and Regulations
Compliance with employment laws and regulations is a cornerstone of HR’s responsibilities. An annual review of the employee handbook ensures it aligns with current laws and accurately reflects company policies. Engaging a legal expert for this review can identify potential compliance issues that might lead to litigation, and using an HR compliance checklist can help streamline this process.
Regular audits of employment records verify compliance with various labor regulations, including laws related to diversity, equity, and inclusion, as well as employee overtime hours and payments. Being informed about legal changes that impact year-end processes can prevent costly mistakes and ensure smooth operations.
Verifying worker classification mitigates disguised employment risks and helps check for impending legal changes in employment, taxation, and payroll laws. Monitoring changes in federal, state, and local regulations ensures HR remains compliant with new wage laws, healthcare mandates, and leave policies.
Reviewing Employee Handbook and Policies
The employee handbook should be updated annually to reflect changes in PTO policies, compensation, and employee benefits. Every section of the handbook – from work related injuries to vacation time for part and full time employees to general expectations of the organization – should be reviewed.
Involve staff in the review process to obtain valuable insights and ensure transparency. Add disclaimers to the handbook to clarify the company’s intent and help mitigate implied contractual obligations.
Some states require a legal review of changes to the employee handbook. Since this takes even longer, it’s important to start right away if your goal is to complete the changes before the new year.
Communicate any updates to the handbook to employees promptly, and inform them immediately after changes are implemented. This helps meet compliance requirements and reduces misunderstandings by ensuring everyone is aware of current policies and procedures.
The handbook should be clear and consistent with the company’s actual policies and culture to avoid confusion. A well-maintained employee handbook serves as a crucial reference for both employees and HR professionals, guiding daily operations and decision-making.
Employee Information Verification
By maintaining accurate record-keeping, HR aids in compliance, streamlines day-to-day HR operations, and enhances overall departmental efficiency. Accurate employee information is especially crucial for generating correct year-end documents like W-2s.
Complete the following in regards to employee records:
- Verify employee names and addresses – this ensures timely delivery and helps avoid unnecessary printing costs.
- Double-check Social Security numbers on W-2 forms to prevent penalties from the IRS.
- Ensure all employee files and practices comply with legal requirements.
- Back up HR data and employee records.
Promptly updating employee records to reflect changes in addresses, contact details, and employment status throughout the year will alleviate the workload at the end of the year. It can also make a difference in the taxes taken from an employee’s paycheck, especially if the move to a different city. Best to ensure those changes are made as close to the move as possible to keep the taxes correct for both employee and the municipality.
Prompt updates ensure all personnel files are accurate and up-to-date, crucial for both internal and external audits. It also ensures employees don’t run into issues with their own taxes or social security benefits.
Payroll and Tax Compliance
Payroll and tax compliance is yet another critical year-end task. In preparation before the coming year:
- Review current tax rates and new wage base limits ensures accurate payroll processing.
- Confirm next year’s payroll schedule and pay period dates to maintain smooth payroll management.
- Prepare fourth-quarter payroll tax returns and annual tax reports to finalize tax reporting. This includes ensuring that your company is in compliance with changing minimum wage rates and compensation rules, and maintains adherence to current employment laws.
Stay informed about filing deadlines and requirements, such as distributing W-2s and filing electronically. You’ll prevent penalties and ensure compliance with federal and state employment taxes.
Benefits and Open Enrollment Preparation
Open enrollment is an important period for both employees and employers, typically lasting two to four weeks. The open enrollment time slot allows employees to select or modify choices in benefits, such as health insurance, dental, and life insurance. Employers should assess whether their employee benefits package meets the needs of employees – before open enrollment begins. Thorough preparation can result in a successful open enrollment period.
HR managers must:
- Ensure compliance
- Distribute annual compliance notices
- Answer employee questions
- Communicate changes clearly
- Prepare and distribute 1095-C forms to employees (ensures compliance with the Affordable Care Act)
Provide educational resources to help bridge the ‘knowledge gap’ employees often face regarding health insurance.
Effectively communicate during open enrollment. Remind employees of deadlines and help them better understand their health insurance and benefit options. For a remote or hybrid workforce, employers can use virtual tools and resources to facilitate open enrollment for employees.
Finally, be sure to send a survey after year-end to gather feedback on employee information availability for benefits enrollment. This can help you improve your year end strategy next year.
Flexible Spending Account and Benefits Reconciliation
Employees must submit receipts for FSA reimbursement for the year 2024 by December 31, 2024. HR should remind eligible employees to use up any outstanding ancillary benefits before they expire at year-end. It is also crucial to remind employees to submit receipts for reimbursement of work-related expenses.
If your company uses a QSEHRA (Qualified Small Employer Health Reimbursement Arrangement), employees must submit their medical and/or dental insurance receipts incurred throughout the year before year end. Here is another area where these can be submitted regularly throughout the year and then reviewed at year end. Maintaining these receipts is a legal requirement to remain compliant with the QSEHRA program.
Reconciling benefits at year-end ensures all employee benefits packages are accurately accounted for. This process prevents discrepancies and ensures employees receive the benefits they are entitled to.
Conduct Annual Performance Reviews
Annual performance evaluations are essential for recognizing employee achievements and planning future goals. While organizations may schedule annual reviews at any time throughout the year, end of the year can be an ideal time to complete these reviews. Most employees are in the mindset of reflection and improvement for New Year’s resolutions, so their review can easily support that line of thinking.
Effective performance reviews incorporate employee input and manager observations, fostering a collaborative discussion. Using performance review software can streamline evaluations and enhance feedback quality.
Performance reviews are often linked to workers comp policy reviews. If this is the case at your company and they are done at year end, workers comp policies must also be reviewed.
This is also a great time to conduct year-end employee satisfaction or engagement surveys to inform next year’s HR strategies. These evaluations provide valuable insights into employee morale and areas for improvement.
Preparing for the Upcoming Year
Clear objectives for HR activities are essential for organizational success, so it’s time to make your annual plan for next year. Year end should include ample time for your HR team to review the following as a part of your planning for the new year:
- HR budget and resource allocation
- Organizational goals
- HR policies
- Legal changes
- Compensation, benefits, and PTO policy
- Contracts with current service vendors
Manage Staffing Needs
In addition to preparing basic HR activities, you should also be preparing your strategy for the year ahead when it comes to hiring and retention.
Retaining existing employees, ensuring adequate hiring, and ensuring a smooth onboarding process are all essential for an effective HR team. Complete the following to develop appropriate retention and hiring activities for the following year:
- Reach out to departments for staffing proposals to improve workforce planning.
- Review job descriptions to ensure pay transparency and alignment with company goals.
- Set employee orientation dates for new hires to enhance the onboarding process.
- Review your Employer Value Proposition and ensure your activities reflect the EVP.
- Develop your training & development strategy.
Preparing in advance contributes to success in HR activities and sets the organization on the right path.
Summary
In summary, the year-end HR checklist is an indispensable tool for ensuring that all critical HR functions are addressed before the new year begins. From key deadlines to compliance checks, employee information verification, and preparing for open enrollment, each task plays a vital role in the smooth operation of the HR department.
As we look forward to the upcoming year, let’s remember that thorough preparation and proactive management can set the stage for success. By following this comprehensive checklist, HR professionals can confidently lead their organization into 2025, ready to tackle new challenges and opportunities.
Download the HR Q4 Checklist
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