For employers, the stakes for compliance have always been high. Failing to properly manage your tax and HR compliance programs can result in steep fines or reputational damage.
The good news is that streamlining and simplifying compliance can help alleviate many potential issues. Essential tasks, such as staying on top of regulatory changes and distributing employee statements, don’t have to be time consuming or overly complex. Let’s look at five steps your organization can take toward easier compliance success.
1. Reliably keep pace with changing regulations
Regulations aren’t static. Everything from the new federal Form W-4 to the vast array of state and local tax forms get updated regularly. In fact, more than 60% of tax withholding forms change each year.
These ongoing shifts can seem overwhelming for large employers:
- For example, the 2020 W-4 is starkly different from its predecessors since it does away entirely with allowances. The draft versions were also updated several times in anticipation of the 2020 introduction.
- At the state level, governments often make numerous changes that affect employers. Nonresident taxation and occupational licensing taxes are two prime examples. Both require organizations to perform complex due diligence to make sure they’re in full compliance.
Overall, there’s just a lot to keep track of if your company has employees spread across many states. Some organizations have combated the issue by assigning a subject matter expert (SME) who monitors all applicable changes at various levels of government. This approach has became popular in recent years with companies introducing roles such as a chief compliance officer to oversee the entire compliance portfolio.
An even easier way to manage your ongoing compliance needs is to partner with an external provider. Experienced service providers, including CIC Plus, ensure that companies are always up-to-date with the latest regulations, so that they don’t get surprised by noncompliance findings.
2. Automate key processes throughout HR
Modern HR software and technology should, in theory, make compliance easier. But in practice, many teams do not use these applications appropriately, at least according to one survey that found only modest adoption among purchasers of such solutions.
Instead of learning and using integrated and automated platforms, HR and payroll teams fall back on manual and paper-based processes that they know. Unfortunately, doing so can prove to be risky.
- Consider the fact that the vast majority of spreadsheets – 90%, according to an Oracle estimate – contain errors. Even rigorously tested sheets still routinely feature formula errors in 1% of their cells. That’s a recipe for costly miscalculations and mistakes.
- Since it’s all done by hand, manual HR processing is error-prone, even beyond spreadsheets. Something might get written down incorrectly or key documents could get misplaced.
- It’s all very time-consuming, too, and that affects not only HR and Payroll but your employees as well. Whether it’s navigating through a sea of paperwork during onboarding or taking too long to get requested information, these issues can damage the employee experience.
Fortunately, automation and self-service tools can help. Forms can be moved into an online system that is securely accessible by employees as well as admins as needed. Administrators can also assign permissions to control access, plus run reports to track the company’s compliance progress.
3. Encourage employees to sign up for electronic delivery
Picture a familiar scene: It’s almost tax season. Everyone needs their forms for the just-completed work year. But the vast majority of your employees still haven’t opt-in to receive their tax and ACA statements electronically.
In addition to paper statements being more costly to produce and deliver, employers can experience other issues as well. It might take longer than expected for employees to get their statements due to postal delivery delays during the winter. Payroll teams can also become overwhelmed by the rush of requests from employees asking when they will receive their statements or needing additional copies.
In contrast, electronic delivery of tax statements makes life much easier for everyone involved. Employees can get what they need, when they need it, while Payroll teams spend less time fielding requests and more with other priorities.
4. Set up a convenient and secure way to access historical records
Proper compliance requires keeping certain records on file for a designated period of time. For instance, I-9s and pay statements needed to be retained for three years.
Easy, yet secure, access to these files is paramount. Admins must have a reliable way to retrieve compliance-related records in case the organization is ever audited. Similarly, employees need to be able to retrieve historical tax and pay records for a variety of purposes.
Ensuring sufficient access is easiest via a cloud-based solution. Cloud services provide the right combination of scalable storage space and efficient file organization on the backend, and intuitive user interfaces and secure authentication on the frontend.
5. Take advantage of SSO for better data security and user experience
Single sign-on (SSO) combines airtight security and maximum convenience. Users can have one set of credentials to log in to a variety of services, eliminating the need to remember mulitple usernames and passwords. It also lessens the risk of passwords being stored across a variety of sites and stems the tide of password reset requests.
For HR and Payroll operations, SSO can be another way to improve efficiency and deliver a better employee experience. Someone who has logged into the company intranet with SSO can then access their pay statements, tax statements, and other documents without needing to remember a separate password for that system.
Need guidance on any or all of these steps? CIC Plus is ready to help. Reach out to our team or visit our Insights blog for more information on how we can make easier compliance a reality.