Now that June is coming to an end, the first half of 2018 is in the rear view mirror. However, the remaining months will be a busy, bumpy ride if you don’t get your payroll and HR in-order for the rest of the year. New Jersey employers especially have several new labor law requirements that require a thorough review and policy update to ensure legal compliance.
From new rates, to records, and even legal requirements, a mid-year payroll checkup is recommended annually so you can prioritize the right projects for July-December.
As a payroll director or HR supervisor, ask yourself the following 7 questions:
1. Are policies and timekeeping requirements updated for Paid Sick Leave?
New Jersey Governor Phil Murphy signed the state’s official Paid Sick Leave Act into law in April 2018 and it will formally take effect in late October 2018. While most private companies already had paid time off (PTO) programs in place, there were still over a million workers that were not permitted paid sick leave. If you already offered paid leave for diagnosis, treatment, recovery, and preventative medical care for personal physical and mental illnesses and injuries, compare your existing policy with the requirements of the new law and adjust accordingly to avoid future fines and penalties. If you do not currently offer paid sick leave, the time is now to craft a policy and communicate it to your employees before the October deadline. Remember, there are no exceptions when it comes to business size for the mandatory paid time off.
2. Have you reviewed job descriptions for “substantially similar” positions?
In April 2018, New Jersey’s governor also signed into law the Equal Pay Act as an extension of the state’s discrimination law. This formal legal protection goes into effect on July 1, 2018 and serves as a wake up call to level the playing field when it comes to conscious or unconscious gender inequality relating with respect to wages. Review your organization’s job descriptions and corresponding salaries to minimize your risk of penalties or legal action. Remember that similar work is considered close in skill, effort, and responsibility and that pay differences can be reasonably justified by seniority, merit, job-related training, experience, education, and production quantity or quality. Update the job descriptions in your Employee Handbook accordingly.
3. Are unearned pay discrepancies obvious on your payroll?
If you are not a New Jersey business, the Equal Pay Act may not directly impact you yet, but it is one of the more aggressive attempts at balancing gender inequality in the workforce and you can bet other states will soon follow. Diversity is a growing priority and value in today’s business world, so it is recommended that you review your company payroll for red flags if pay is varying too much across members of protected classes within similar positions at your organization. Remember, legal protections are in place for all protected classes (disability, race, religion, marital status, etc.), not just gender.
4. What goals did you set in January (and have you made progress)?
While state and federal laws may dictate the projects payroll and HR personnel focus on, there still may be initiatives and priorities set by the business owner or executives. Do they want the business to be paperless and mobile-friendly? Is diversity the priority? Are they the driving force behind a new health insurance plan or outsourcing partner? Now that it’s mid-year, it’s a good idea to revisit your January game plan, assess your current progress, and adjust your plan to make sure you’re on course to meet your goals come December.
For instance, did you want to see a smoother year-end compared to last year? With W2s and 1099s , the start of each year can often be hectic. Consider undergoing a record check-up this summer so your tax, employee, and independent contractor forms can be accurate, organized, and allow for a streamlined process later on. This can include I-9 forms, updated W-4 forms, etc.
Were you trying to progress with becoming paperless within the year? Continue on to #5…
5. Are you ready for paperless payroll?
More and more businesses are understanding the security improvements and cost savings that come with a paperless office, and going paperless with payroll is one aspect of the business to consider for transition. Employees can conveniently receive their pay by direct deposit or pay card, access their paycheck history and time off accruals through a Self-Service portal, and even synchronize their timekeeping app or software directly to your payroll system. While a streamlined and electronic process will be more efficient down the line, it does take some legwork to get there. It could take months to evaluate software options, vendors, and programs, let alone training, communicating, and implementing, so if your company’s goal was to be on a new paperless process before January 1, 2019, start the researching and planning now.
6. Are you aware of any minimum wage increases or other applicable law changes?
Other than January 1, most other rate hikes take effect on July 1. Know what minimum wages, FUTA percentages, or any other tax rate changes may go into effect on July 1 so you can update your payroll accordingly. It’s also recommended to review your payroll tax filings from this year’s first two quarters in case any corrections are needed. Note that the IRS takes late and inaccurate payroll filings very seriously, and you don’t want to be on the hook for penalties and fines from noncompliance.
You can also use this time to look for any anticipated minimum wage hikes for January 1, 2019. If there are anticipated wage changes for the new year, this gives you time to plan out a pay increase plan in time. You should also check up on your state’s legislature so there are no surprises come January 1 with any new DOL or employment law updates.
Last but not least, this coming tax season will mark the first tax returns to be filed under the new Tax Cuts & Jobs Act. There may be a learning curve going forward on what changes employer and employees are going to notice. As a reminder, Abacus Payroll and Alloy Silverstein can keep you and your employees completely up to speed on the new tax law.
7. Have you assessed and updated your Employee Handbook?
Many of these questions lend to the fact that you need to update your Employee Handbook this year. In addition to Paid Sick Leave and Equal Pay Act, other HR hot topics include addressing sexual harassment in the #MeToo era along with updates regarding social media and cyber bullying. If your business does not have an Employee Handbook, now is an important time to consider creating and distributing one. If you need assistance with Employee Handbook reviews, updates, or starting from scratch, consider Abacus Payroll’s HR Help Center.
Abacus Payroll’s payroll specialists are here to make sure you are compliant and ready to take on the rest of 2018. Contact us for assistance or more information at 856.667.6225.