I know, it’s the height of summer (at least it is if you’re listening to then when it was first released), It’s the end of June. And honestly, the only thing on anyone’s mind right now (well, at least on my mind right now) is when can I take a chunk of time off.
But the middle of the year is the perfect time for employers to start getting themselves organized, both for year end and for next year. Well, actually for some immediate changes as well.
So,, in today’s episode I’m going to cover 5 areas you should think about – right now.
Of course, the first is payroll. It’s a great time to check things like your quarterly payroll tax filings. Do they have the same numbers on them as the employee’s pay stubs? It’s really easy to check this – just pull the pay stubs from the last payroll date of that quarter.
So, if the last payroll date (not pay period date, but actual date the check comes out) – so if the last payroll date in March was March 30th; then pull the pay stubs from that March 30th paydate. And simply compare the year to date totals (it should be listed as a separate column), with the tax filing. Those two numbers should be the same. If they aren’t, something is out of balance. So, then you’ll have to do some digging to find out where everything went out of sync. Believe me, it’s far easier to do this mid year (or even better yet, each quarter), than it is to find out at the end of the year that things are off and now you have to search across a year’s worth of payroll to find the mistake. To say nothing of having to refile multiple tax quarters. All that can be time consuming, majorly annoying, and expensive. So get a jump on those tax filings now.
Also, keep an eye on any increases in the minimum wage where you are. During the past few years, numerous states have had minimum wage increases that generally happen at the beginning of the year. But a lot of cities and counties have joined the party – and a lot of them change mid year on July 1st. So you should stay on top of what is happening in your state, but also in your local area as well.
Once you’ve figured out which rates apply to you, compare them against your current salaries to see if you have to make any adjustments to stay compliant.
Oh, and don’t forget – sometimes it’s not just the hourly rate that changes, many times it’s the minimum rate of exempt level employees too. So don’t just look at your employees with an hourly rate, take a close look at the people paid a salary rate as well.
“… The past year – well, actually years – have been really unique. And because of the pandemic, we have seen lots of programs involving tax credits and rebates for employers. Well, let’s be sure you get the most benefit available to you. But to do that you’ll need the numbers.”
Next up is Year End prep. Now, mostly this is making sure the information you have on file for everyone is correct. Do you have their current address (you’ll need that for W-2s etc.). Is everyone who is supposed to be in the benefit plans actually in them, and were people who should have been removed actually off the plans (it’s really easy to forget that part).
Are all your retirement contributions up to date. If not, get that sorted now.
And year end prep would be nothing if I didn’t mention tax prep. Now is the time to start pulling together all those notes and numbers, so you have all the information you’ll need for your accountant at year end.
Now I know there are a lot of pieces of tax prep that we could talk about – but I’m going to focus on the things around being an employer.
The past year – well, actually years – have been really unique. And because of the pandemic, we have seen lots of programs involving tax credits and rebates for employers. Well, let’s be sure you get the most benefit available to you. But to do that you’ll need the numbers.
Have you had employees who used any of the supplemental sick time due to the pandemic. How about the employer tax credit program. Listen, I’m not an accountant, so I can’t give you the details of what’s available or what you might qualify for – but I can tell you that now is the time to talk to your accountant. Because the sooner you get started figuring out what’s what, the easier it will be for you to get the information they need.
And the last, but certainly not least important area is your team.
Start by looking at your performance review program – is it time for mid year reviews?
And , just an editorial note here. Think about getting away from the mid year, year end review cadence. Discussing performance with your team is much more effective when it’s done more often. And besides, I’m sure the managers and team leads would much prefer more, but shorter, check ins vs. having to do multi page review forms for everyone on their team, all within a 2 – 3 week period. As my former Executive Assistant used to say – ain’t nobody got time for that.
It’s far better for your employees too. It’s always better to get more, timely info on your performance than it is to get less. So think about opting for a more fluid, frequent review process. We’ll take more about performance programs in a later episode.
Now if you have some sort of bonus program in place, take a deep dive into the numbers. Has anything changed in the business since you put those targets together. Are you earmarking the proper amount in your monthly budget?
Basically, I’m saying – use mid year to confirm your performance review and award programs are on target.
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Here’s one that is often overlooked – paid time off. Have people been taking time off throughout the year. Is anyone building up a huge bank of PTO. If so, it’s a great time to think about telling people to take some vacation time. It’s good for their soul, and the liability line of your budget.
Seriously, team members should take time off. We all need time to recharge and reset. So have them schedule their vacation time for the reminder of the year now (that way you’ll have the opportunity to make any adjustment that might be needed for work flow – after all, everybody can’t take the 3rd week of August off).
And speaking of time off – now is a good time to think about what holidays you will observe next year. Recently some holidays have been added to the federal calendar, so now is a good time to take a moment to consider which holidays make sense for your business, what (if anything) you are going to do about people who work on a holiday, and any other policies around holidays you may want to put in place.
Oh, another thing about holidays…..believe it or not…now is actually the time to start planning for any year end holiday celebrations you want to have. Maybe it’s a lunch, or dinner – or maybe it’s a gift – or, frankly maybe its nothing. But either way – now is the time to start making decisions and planning.
Another area that gets overlooked is employee benefits. The year ACA was enacted, a lot of employee insurance carriers changed their open enrollment dates to December. As a result, there are a lot – and I do mean a lot – of companies with benefit re-enrollment dates in December.
Well, now is the time to put your head together with your insurance broker and start talking about any changes you might like to see for next year’s program. Sure, it’s too early for you to know what your renewal numbers will be just yet (they usually don’t come out until appx. 90 days before the open enrollment date). But it’s a good time to have discussions around what you like and don’t like about your current plan; and any changes on your wish list.
Oh, and while we’re at it – be sure to double check the information you have on file for your current plans. Things like everyone’s salary rate for life insurance or disability plans. Are those rates up to date? So many times we forget to update that info throughout the year.
And finally, don’t forget to start thinking about strategy planning for next year. Really. Believe it or not, next year is right around the corner – so we have to start thinking about it and planning for it – now.