As 2021 draws to a close, FCA Legal Counsel prepared a checklist to remind signatory contractors of the many recommended administrative tasks needed to close out a successful year. The following checklist is intended to help signatory contractors avoid year-end pitfalls and prepare for a successful 2022.
General Human Resources
- Employee Data
The end of the year is a good time to review your employee records to ensure that you have the proper information, including the employee’s personal information (address, social security number, etc.), employment status, wages and deductions, tax rates, and any paid time off balances. Remember, your 2021 Form W-2s need to be mailed to employees by January 31, 2022.
- Record Retention
The end of the year is also a good time to review your employee records and check record retention guidelines. Dispose of outdated termination and outdated job applications properly.
- Insurance Policies
This is also a good time of year to speak with your insurance broker regarding your current insurance policies. You should ensure that you have appropriate coverage for all of your business risks, including an assessment of whether you need additional coverage for risks relating to cyber liability and data breaches.
Payroll and Tax
- Employee Retention Credits
The Employee Retention Credit (ERC) was created under the CARES Act, Pub. L. 116-136, and allows qualified employers to claim tax credits for paying qualified wages to employees that they retained on their payroll. The American Rescue Plan Act of 2021, Pub. L. 117-2, extended the tax credits through December 31, 2021, but, in November, the Infrastructure Investment and Jobs Act, Pub. L. 117-58, retroactively ended the ERC program as of September 30, 2021, except for recovery startup businesses.
- FFCRA Tax Credits
If the contractor voluntarily provided emergency paid sick leave or emergency FMLA in 2021 in accordance with the Families First Coronavirus Response Act, Pub. L. 116-127, as amended, then the contractor may be eligible for a dollar-for-dollar tax credit.
- Deferred Tax Liabilities
Under the CARES Act, Pub. L. 116-136, employers were allowed to defer federal employment tax deposits for certain employer payroll taxes incurred from March 27, 2020 through December 31, 2020. However, employers who took advantage of the program are required to pay the first 50 percent of any deferred taxes by December 31, 2021 and the second 50 percent by December 31, 2022.
- FICA and FUTA forms
- For the Fourth Quarter of 2021, Form 941 (FICA) is due by January 31, 2022.
- Form 940 (FUTA) for 2021 is due on January 31, 2022. However, if you deposited all your FUTA tax when it was due, you may file Form 940 by February 10, 2022.
- Fringe Fund Reporting Requirements
For their union employees, contractors must ensure that all hours and payroll documentation has been provided to the applicable funds, including any Health & Welfare Fund and Pension Fund. Be sure to review the collective bargaining agreement and any trust documents to ensure that you have provided the proper documentation and are maintaining the appropriate records.
- FMLA Compliance
The Family and Medical Leave Act (FMLA) entitles eligible employees of covered employers to take unpaid, job-protected leave for specified family and medical reasons. The FMLA applies to a private-sector employer only if the Company employs 50 or more employees in 20 or more workweeks in the current or preceding calendar year, including a joint employer or successor in interest. Contractors near the 50-employee threshold should review their records to determine whether they are covered by the FMLA in 2022.
- Compliance with COVID-19 Vaccine Mandates and Testing
OSHA announced a Jan. 10, 2022 compliance deadline for its COVID-19 emergency temporary standard requiring all workers of employers with 100+ employees must either be fully vaccinated or submit to weekly COVID-19 testing. The compliance date for the vaccine and testing requirement is Feb. 9. Enforcement of the other two U.S. federal vaccine mandates are currently halted, contractors must be mindful of potential state and local vaccination requirements. For example, by Dec. 27, private sector employees in New York City will need to show proof of receiving at least one dose of a COVID-19 vaccine to work on the employer’s premises.
Contractors who may be subject to one of the federal vaccine mandates should continue tracking the litigation against the mandates and consider taking pre-implementation steps (such as checking employees’ vaccination status), while they await decisions from appellate courts. This will help contractors be ready to comply if any of the injunctions are lifted.
- State and Local Employment Laws
In addition to federal laws, contractors must be aware of any state or local employment laws that may apply to contractors depending on where they do business. For example, contractors in California must comply with the state labor code, which requires employers to provide employees with paid sick leave, as well as several municipalities which also require varying amounts of paid sick leave. Contractors should take time to familiarize themselves with any state and local laws before commencing work in a new jurisdiction.
- Workplace Labor Posters and Notices
State and local laws vary, so contractors should ensure that they have the proper workplace posters and any employment notices. For example, employers in California, Connecticut, and Minnesota are required to provide “wage notices” to employees providing information about the employee’s pay.
- EEO-1 Report
Employers who have at least 100 employees and federal contractors who have at least 50 employees are required to complete and submit an EEO-1 Report (a government form that requests information about employees’ job categories, ethnicity, race, and gender) to EEOC and the DOL each year. The EEOC will begin accepting 2021 EEO-1 Reports on April 12, 2022.
- Employee Handbook
The end of the year is a good time to review any employee handbook to ensure that it is up-to-date with any federal, state, or local law changes. In addition, given that COVID-19 appears to be here to stay, you could consider updating your handbook to address areas such as vaccination, masking, and remote work. Also, reviewing your handbook will ensure that it appropriately outlines your current business practices regarding privacy, compensation, performance reviews, social media use, attendance, time-off, break periods, benefits, workplace safety, discipline, and termination.
- Mandatory Trainings
Contractors would be well-advised to review any mandatory training programs, including those relating to COVID-19, as well as any certifications that are required of workers, such as OSHA 10 or OSHA 30 certifications. This is also a time to consider whether your organization wishes to offer additional training in 2022. For example, many contractors are considering annual sexual harassment training for all employees and additional training for supervisors. Diversity, Equity, and Inclusion training is also under consideration by many contractors.
For contractors, the end of the year sometimes offers a reprieve from an otherwise busy year. But, before you leave your office for the Holidays, be sure that you check off all of the items above to ensure that your business is well prepared in 2022 and beyond.