Human Resource Professionals are pros at change management, and boy are things about to change. The new tax code is now law and you'll see some changes in your company and to your employees.
So how do HR Pros need to prepare for this brave new world of tax reform? Here are a few tips:
Get your health offerings solidified. Just when we had figured out how to navigate the ACA, and help our employees do so, it’s been changed again! For 2019, the individual mandate has been repealed, so anticipate some shifts in what coverage is offered. Employees that decided against healthcare coverage through their employers may change their minds. Small businesses will be affected even more. Now is a great time to call your insurance reps and figure out what, if anything, will be changing for your coverage options. Once you have figured out if there are any changes to healthcare coverage for your employees, focus on communicating those changes and any new options to them.
Payroll might be a nightmare. Because of the changes to tax law, the IRS will make new withholding tables, which means all payroll companies and administrators will have to recalculate a whole lot of formulas. In short, paychecks will be updated and it will probably take some hard work on payroll’s part and some explanation to employees on HR’s part.
Assess leave policies for employees making under $72,000 per year. If you provide paid family and medical leave of at least two weeks, and pay at least 50% of the employee’s regular earnings, your company will receive a tax credit ranging from 12.5% to 25% of the cost of each hour of paid leave.
Retirement plans may change for former employees and younger employees. Employees using a 401(k) plan and are currently paying a loan must have it paid completely by the latest date on which the former employee can file their tax return for the year of the loan default. If not, the person is considered to have defaulted on the loan and must pay income tax on the balance. Those under 50.5 years of age must also pay a penalty.
Benefits “lite” will be affected. Some of the things your employer offers may not even be considered benefits by your employees. Until you tell them they can longer be reimbursed for “X”. Work with your tax team and benefits administration team to mitigate and communicate, especially if you offer the following:
Maren Hogan is a seasoned marketer, writer and business builder in the HR and Recruiting industry. Founder and CEO of Red Branch Media, an agency offering marketing strategy and outsourcing and thought leadership to HR and Recruiting Technology and Services organizations internationally, Hogan is a consistent advocate of next generation marketing techniques. She has built successful online communities, deployed brand strategies and been a thought leader in the global recruitment and talent space. You can read more of her work on Forbes, Business Insider, Entrepreneur, and The Red Branch Media Blog.
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