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Workforce Management

Payroll Compliance Checklist

Staying compliant requires your full attention. Not only do you have to monitor the local, state, and federal HR compliance guidelines for changes and updates; you must also be able to comprehend complex regulations and tax laws to ensure your systems are updated for each payroll run. Do you know where your organization stands? To help you identify any gaps, we’ve put together a quick list of questions to consider related to payroll compliance.

Tax Compliance

Questions to consider:

  • Are your employees’ IDs available in your payroll system for tax authorities?
  • Are your employees’ Social Security Numbers correctly entered in your payroll system and valid?
  • Have your employees entered their appropriate address that can be used on their W-2?
  • Are your State Unemployment Insurance rates up to date?
  • Does your provider quantify State Unemployment to ensure you are controlling costs?

Immigration Reform & Control Act

This act requires that employers verify the identity and employment eligibility of anyone hired to confirm that all new employees may legally work in the U.S. via completion of the Employment Eligibility Verification Form.

Questions to consider:

  • Did you know that employers must complete Form I-9 for each employee hired after November 6, 1986?
  • Did you know that employees must sign a completed Section 1 of Form I-9 no later than their first day of employment?
  • Did you know that employers are required to sign a completed Section 2 of Form I-9 within three business days of a new hire’s first day of employment?
  • Are you using the updated Form I-9?

Fair Labor Standards Act (FLSA)

The FSLA is a federal law which establishes minimum wage, overtime pay eligibility, recordkeeping and child labor standards affecting full-time and part-time workers in the private sector and in federal, state and local governments.

Questions to Consider:

  • Do you pay non-exempt employees for hours worked over 40 in a work week?
  • Do you review employee classifications yearly?
  • Do you update the following documents each year?
    • Employee handbook
    • Job descriptions
    • Company policies
  • Where do you turn for HR information to update your policies and handbook?
    • Lawyer
    • Internet
    • HR provider
    • Other
  • Do you use a time solution to record all hours worked?
  • Are you retaining employee timecards and time sheets for at least two years?
  • Are you retaining payroll records for at least three years?

Compliance Regulation Overview

The Affordable Care Act (ACA) requires employers with 50 or more full-time equivalent employees to offer minimal essential health coverage at an affordable rate to all full-time employees (30+ hours) or face a penalty.

Questions to Consider:

  • Do you have at least 50 full-time employees and/or full-time employee equivalents?
  • Are your health benefit plans considered affordable for your employees?
  • Do you know which of your employees are considered full-time and eligible for health care coverage?
  • Have you sent a 1095-C form to your employees?
  • Have you filed 1094-C and 1095-C forms with the IRS?
    • Employers must file by February 28 (or electronically by March 31).
    • For 250+ employees, electronic filing is required.

Equal Employment Opportunity Commision (EEOC)

The EEOC requires private employers with 100 or more employees and federal contractors with 50 or more employees to submit data for a specific pay period including the number of employees by race and sex as part of the EEO-1 Report.

Questions to Consider:

  • Are you required to complete the EEO-1 Report?
    • Applies to employers with 100+ employees and federal contractors with 50+ employees
  • Are you using an automated time solution to accurately track employee hours?
  • Do you have one platform to easily access HR, payroll and time data required for the new EEO-1 Report?
  • Are you prepared to track earnings and hours worked for each of your employees to include in the new EEO-1 Report?
  • Are you prepared to file the new EEO-1 Report on time?
  • Are your HR records up to date?
  • Are you tracking performance reviews, coaching and disciplinary files to explain pay differences within your workforce?
  • Are you using an applicant tracking system to maintain hire/offer logs and reasons for non-selection to protect your company in case of EEOC violations?

How Paycor Can Help

Paycor is the trusted compliance partner for more than 29,000 organizations nationwide. Our payroll processing and tax filing reduces errors and ensures compliance with federal and state regulations. From accurate HR, payroll and time solutions to expert support, Paycor helps you see around corners, so you don’t fall victim to compliance regulations or government audits.

  • Paycor payroll processing and tax filing reduces errors and ensures compliance with federal and state regulations.
  • Paycor HR allows employers to easily manage employees by tracking and storing critical documentation like performance reviews, discipline and incident reports, training and certifications.
  • The HR Support Center offers guides and templates every organization needs to manage HR, such as employee handbooks, company policies, job description, federal and state law alerts and checklists.
  • Paycor’s Onboarding solution will streamline your hiring process and help ensure your employees electronically complete Form I-9 prior to their first day. The employee’s I-9 will then be electronically stored within their profile and easy to access, meaning recordkeeping is simple for you.
  • Paycor Time & Attendance offers visibility into employee hours, ensuring that your organization can classify jobs properly, control labor expenses and determine responsibility for providing health benefits.
  • ACA Connect provides the reports and filing services organizations need to comply with the Affordable Care Act.

Please note, this information is not intended to serve as legal advice, only as information your organization should consider when reviewing compliance regulations. We recommend that you consult with an attorney to discuss specific compliance questions that may affect your organization.

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