While this swing-and-a-miss by his boss is (hopefully) an exaggeration of pay around the holidays, it does showcase how people depend on their paychecks and bonuses. This sentiment is even more true in winter when spending increases significantly.

It’s therefore critical for companies to understand, plan for, and deliver holiday pay on time. So, how do holidays like Thanksgiving and Veterans Day affect direct deposits?

What Federal Holidays Affect Direct Deposits in 2025? 

• New Year’s Day – Wednesday, January 1, 2025
• Birthday of Martin Luther King, Jr. – Monday, January 20, 2025
• Inauguration Day – Monday, January 20, 2025*
• Washington’s Birthday – Monday, February 17, 2025
• Memorial Day – Monday, May 26, 2025
• Juneteenth National Independence Day – Thursday, June 19, 2025
• Independence Day – Friday, July 4, 2025
• Labor Day – Monday, September 1, 2025
• Columbus Day – Monday, October 13, 2025
• Veterans Day – Tuesday, November 11, 2025
• Thanksgiving Day – Thursday, November 27, 2025
• Christmas Day – Thursday, December 25, 2025

*Federal employees in the Washington, DC, area are entitled to a holiday on the day a President is inaugurated on January 20th for each fourth year.

Why Federal Holidays Matter For Your Payroll

The Federal Reserve and Automated Clearing House (the electronic network for financial transactions including business-to-business payments, direct deposit of payroll, consumer bills, Social Security, e-commerce payments, and tax payments) are closed on federal holidays. 

When the Federal Reserve is closed on holidays, money doesn’t get transferred, AKA direct deposits won’t go through on those days. And while most banks follow suit and close their doors, some remain open but offer minimal services.  

Thus, since your employees won’t receive their direct deposits on holidays, you’ll need to review the next scheduled check date for accuracy and alter the run date to accommodate.

What is Holiday Pay?

Holiday pay is when employees receive compensation, whether or not they worked on a federal holiday. 

Many organizations provide time off and holiday pay for more than 11 federal holidays, such as Easter, Lincoln’s birthday, and election days. 

It’s important to note that holiday pay is part of an organization’s pay policy (such as paying overtime, time-and-a-half, and bonuses) and isn’t tied to the Federal Reserve or Automated Clearing House’s procedures.

Do I Have to Pay My Employees on Federal Holidays?

You must pay your salaried employees their full weekly salary if they work during the federal holiday week. On the other hand, hourly employees do not require pay, as they’re only paid for actual hours worked. 

Are Federal Employees Paid on Federal Holidays?

Yes, the government will pay employees on federal holidays and every four years on Inauguration Day. Most federal employees are entitled to premium compensation when they’re required to work during designated holiday hours. Soldiers are paid by salary and receive equal pay regardless of their work hours.

What if a Federal Holiday Falls on a Weekend?

When the national holiday falls on Saturday, the holidays are celebrated on Fridays. However, if the day falls on Sunday, the holiday will be on Mondays.

The Difference Between Federal and Religious Holidays

You may have noticed that among the 11 federal holidays, only one is a religious day. In fact, Christmas Day is the only religious day officially recognized in the United States. 

To create an equitable and inclusive workplace environment, it’s best practice to have several floating holidays that employees can use throughout the year. Doing so not only enhances work-life balance and attracts top talent, but also respectfully acknowledges people of different cultures and backgrounds. 

Can Federal Employees Receive Paid Leave for Religious Holidays?

Federal employees may change their working schedule to accommodate religious observance that requires abstaining from work at all times during the working week. If employees choose to work on weekends or overtime to make up for the work missed, they’re not entitled to bonuses or additional compensation.

Examples include Jewish employees taking off for Rosh Hashanah and Yom Kippur or Muslim employees using a floating holiday for Eid Ul-Fir. 

3 Tips for Managing Payroll Around Federal Holidays in 2025

Whether you’re currently developing your compensation strategy or already have a plan, it’s wise to consider how you’ll pay your people around federal holidays in 2025. Below are three tips to ensure you choose a strategy that best suits your organization’s needs.

1. Conduct Background Research

Before you say this is how we’ve always done it, it’s essential to consider if there’s room for improvement in your payroll practices around the holidays. 

Make sure you consider your:

• Company finances. You might work at a Fortune 500 company with enough runway to financially support granting your people additional paid days off. Alternatively, you could lead a startup that can’t afford to pay employees holiday pay. Make sure your pay practices around federal holidays match your budget so you can confidently pay your people when it makes sense.
• Workplace culture. Does your compensation and benefits plan match your workplace culture? If not, it’s time to start moving in that direction. Specifically, Xpedition’s team realized their policies needed to align better with their company culture and values. They were intentional about restructuring – they even asked employees their thoughts – before rolling out a new PTO plan.
• Competitors’ holiday pay. Consider your recruitment strategies and how you’ll attract top talent away from your competitors. If your competitors offer the same base pay but an additional three floating holidays, that distinction will come up when candidates choose their future employer. 

2. Communicate, Communicate, Communicate

It shouldn’t come as a surprise when payday is, especially around federal holidays. After developing your strategy, communicate your decision in various ways, including via All Hands meetings, department heads and managers, HR announcements, and your employee self-service portal. 

For example, Fanatics publishes their paid holiday policy publicly so current and future employees are always in the know about specific procedures.

Another part of your communication strategy should be outlining the expectations of your payroll team. For example, if your Director of Payroll usually takes additional days around Thanksgiving, ensure she knows she must submit payroll early so everyone receives their paycheck on time.

3. Hand the Payroll Burden to the Experts

Payroll errors are more common than you think. And we get it – a lot of manual entry is involved when processing payroll information.

In fact, the U.S. Bureau of Labor Statistics reports that 54% of salaried Americans have received inaccurate paychecks, while 46% of hourly employees have experienced incorrect, late, or – wait for it – money deposited into the wrong account. 

To combat these manual errors and regain time, partner with a payroll provider to ensure the right people are getting paid at the right time.

PrimePay at Your Service

As a leading payroll service provider, PrimePay can partner with you to offer support throughout the entire employee lifecycle. Learn more about how PrimePay can help you streamline HR processes, support tax obligations, and manage your payroll calendar as easy as 1-2-3.

Schedule a call today

Please read our disclaimer here.

The post Federal Holidays in 2025: A Guide to Paying Your People appeared first on PrimePay.

By honoring Employee Appreciation Day 2025 (mark your calendars – it’s Friday, March 7), you can help create a supportive company culture and promote positive employer-employee relations.

The Importance of Celebrating National Employee Appreciation Day

Why does employee appreciation matter so much? The below isn’t an exhaustive list, but it helps set the stage for why recognizing your people is essential. 

• It’s the right thing to do. When crunching numbers and viewing your financial runway, it’s easy to lose sight that your employees aren’t commodities – they’re people. Acknowledging your employees extends beyond celebrating their wins; it allows you to be the thoughtful and caring leader you are. 
• It raises retention rates. Studies show that toxic corporate culture is the leading reason for attrition. Moreover, the same study concluded that company culture is over ten times more important to employees than salary. Alternatively, creating a positive culture helps retain and attract top talent.
• It increases productivity. It feels good to be acknowledged, so it’s no surprise that research found that happy employees are 13% more productive than their discontented colleagues during the workday.

24 Creative Employee Appreciation Day Ideas for 2025

Celebrating Employee Appreciation Day in the office is an excellent opportunity to show your employees how much they are valued and appreciated. 

12 In-Person Celebration Ideas

There are many ways to celebrate your employees beyond the standard company-sponsored happy hour. Here are ten ideas to consider to help your employees feel valued.

1. Write customized thank-you notes. Whether you send virtual cards or use old-school stationery, writing personalized notes to each employee is a great way to express gratitude for your team. 
2. Host office awards ceremony. Recognize employees’ achievements with heartfelt and humorous awards. 
3. Schedule a themed dress-up day. Choose a fun theme, like Decades Day, for a day of casual, themed attire that is sure to bring laughs to the entire team. 
4. Have a wellness day. Offer wellness activities like yoga, meditation, and messages with local professionals. 
5. Cater lunch. Reward employees with a catered lunch or order from employees’ favorite restaurants.
6. Decorate desks. Decorate employees’ workspaces and break room with balloons and streamers for a fun surprise when they enter the door. 
7. Allow flexible hours. Allowing employees to leave early or start late lets them use that extra time for personal interests. 
8. Encourage creativity. Set up a painting or craft station for a creative outlet and break. 
9. Invite pets to work. Allow employees to bring their pets for a day. 
10. Hire a food truck. Invite a food truck to shop outside for breakfast or lunch and pay for everyone’s meal.
11. Set up a coffee station. Create a coffee station and snack bar for an all-day treat.
12. Block out time for team-building activities. Team-building experiences work with any budget. Low-key activities (like trivia) and out-of-office ones (like a day of curling) allow employees to bond over things other than work.

12 Virtual Celebration Ideas

It’s equally important to celebrate hybrid and remote employees. Virtual celebrations can be just as memorable and engaging as in-person events. The key is finding creative ways to involve your remote team members in the festivities, ensuring they feel appreciated and included.

1. Cater lunch at home. Give everyone an Uber Eats, Grub Hub, or PizzaTime gift card for a personalized “catered” lunch.
2. Send personalized company swag. Gift cool tech gadgets or branded company merchandise.
3. Build a playlist. Create a collaborative playlist with and for employees.
4. Schedule virtual games. Schedule a virtual experience – like an escape room – for team-building and problem-solving.
5. Record a thank-you video. Create a video compilation of messages from team members. 
6. Create an online recognition wall. Create a virtual wall where employees can post messages of appreciation for their colleagues. 
7. Gift unique items. Get creative with gifts, such as using Unboxed Experiences or gift vouchers, that allow your team to select special gifts on their own.
8. Host an online cooking class. Equip employees with ingredients to make a specific meal in the comfort of their kitchen.
9. Encourage virtual coffee chats. Schedule virtual coffee breaks where teams can connect informally.
10. Have a digital team awards ceremony. Host a virtual awards ceremony to recognize outstanding achievements with digital certificates. 
11. Conduct a virtual wellness workshop. Collaborate with local companies for online wellness workshops, such as a guided meditation session or yoga class.
12. Grant extra flexibility. Allow virtual employees to adjust their schedule – like no meetings on a Friday – to show your gratitude. 

Virtual parties boost morale and are a fun way to unite the team.

Build a Culture of Continuous Appreciation

Ensuring employees feel appreciated is more than just a calendar event. Instead, fostering a culture of appreciation is a long-term commitment that requires ongoing efforts from employers and employees. The more you invest in nurturing this culture, the stronger your team will become and the more successful your organization will be.

Best practices for building a culture of continuous appreciation and gratitude are:

1. Creating a bonus structure. Bonuses and other career-based awards are incredibly motivating and acknowledge hard work and meeting goals.
2. Investing in robust benefits. Another way to show your appreciation is by offering a strong benefits package. You’ll attract and retain top talent and equip employees with the tools to be their best selves.
3. Featuring exceptional employees in company newsletters. Recognizing employees and their efforts across the organization signals that leaders care about their teammates and contributions. 
4. Using a recognition platform. Recognition platforms, such as Assembly, elevate internal communications and help all employees recognize colleagues. 
5. Hosting frequent team-building events. Team-building sessions aren’t just fun and interactive – they also help employees practice collaboration and problem-solving skills.
6. Organize a community service day. Volunteer as a team for a local community project and encourage those working remotely to schedule volunteer activities with friends or family.
7. Offering professional development opportunities. Offer courses or workshops for skill enhancement. 
8. Grant e-learning subscriptions. Provide subscriptions to online courses or learning platforms for continued education and career growth. 
9. Building an employee recognition program. Celebrate work anniversaries, acknowledge high-performing employees, and welcome new employees to impact your workplace culture positively. 
10. Model a healthy work-life balance. It’s one thing to encourage employees to focus on their well-being, but another to see it happen. Work-life balance starts with the leadership team modeling that behavior for the entire company.

Key Dates: Employee Appreciation Day and Other Related Celebrations

In addition to Employee Appreciation Day, numerous other celebrations throughout the year can help boost employee morale and strengthen employer-employee relations. Recognizing the value of diverse professions and acknowledging their hard work fosters an environment of continuous admiration and appreciation. 

Some of these inspiring celebrations include:

• Community Manager Appreciation Day: Jan 27, 2025
• National Employee Benefits Day: April 6, 2025
• National Lineman Appreciation Day: April 18, 2025
• Administrative Professionals Day: April 23, 2025
• Global Employee Health and Fitness Month: May 2025
• Public Works Week: May 18-24, 2025
• System Administrator Appreciation Day: July 25, 2025
• Global Company Culture Day: September 18, 2025
• National Pharmacy Technician Day: October 21, 2025

Measure the Impact of Employee Appreciation Initiatives

Measure the Impact of Employee Appreciation InitiativesWhile it’s vital to implement employee appreciation initiatives, you’ll also want to measure their influence on employee satisfaction, engagement, and retention. By tracking and evaluating the success of your efforts, you will gain valuable insights into their effectiveness and make informed decisions about future initiatives.

To measure the impact of your employee appreciation initiatives, consider anonymously collecting employee feedback, measuring employee engagement and retention rates, and analyzing the impact of these initiatives on employee productivity. By doing so, you’ll be able to determine whether your efforts are making a positive difference in your workplace and identify areas for improvement.

PrimePay’s Human Resources Team uses Assembly to cultivate employee appreciation in an ongoing manner. Company activity is reviewed within Assembly to understand team recognition better.

Employee Recognition Helps Build a Positive Company Culture

In short, celebrating Employee Appreciation Day and fostering a culture of continuous appreciation is crucial for building solid employer-employee relations, boosting employee satisfaction, and improving employee retention. By planning creative celebrations for both in-office and remote teams, you can ensure that every team member feels valued and appreciated.

Adapt your appreciation efforts to accommodate remote and hybrid teams’ unique needs, and remember to measure the impact of your employee appreciation initiatives to ensure their success. Doing so will help create a thriving work environment where employees feel motivated, engaged, and committed to performing their best.

The post 24 Creative Ways to Celebrate Employee Appreciation Day (and 10 Ways to Recognize Your People Year-Round) appeared first on PrimePay.

With 22% of the American workforce projected to be remote by next year, mastering the art of selecting productive remote talent is essential for sustaining growth and maintaining a competitive edge. 

As organizations expand their remote teams, selecting candidates with the right skills and who excel in a remote work environment is essential. Below are six strategies to help you hire the right talent to increase employee productivity and create a strong remote employee experience. 

1. Determine If Remote Work is Right For Your Team

Before diving into hiring strategies, you should evaluate if remote work fits your team’s structure and goals. 

While remote work has undeniable benefits, not every team or role thrives in a remote environment. Here’s how to gauge if it aligns with your organization’s needs.

• Assess team experience: Consider the tenure and experience levels across your team. For seasoned employees, remote work may feel natural due to established knowledge and autonomy. But for newer or entry-level staff, remote environments can sometimes lead to challenges in training and onboarding. Think about how remote work may impact productivity, collaboration, and learning for different experience levels on your team, and consider how you can combat any obstacles (like mentorship or in-person events).
• Evaluate cultural alignment: Your company’s culture is a strong indicator of remote compatibility. If your organization values in-person interactions for brainstorming or teamwork, shifting to remote may create a cultural gap. On the other hand, if flexibility, independence, and digital communication are already core to your culture, remote work could enhance engagement. Conduct surveys or hold open discussions to understand if employees feel connected and productive when working remotely.
• Identify roles requiring on-premises work: Not all roles adapt well to remote settings. For some industries, certain job functions – such as equipment-dependent tasks or hands-on customer service – require an on-site presence. Conduct a role-based analysis to identify which tasks can be performed remotely and which can’t. If only specific roles need to stay on-premises, a hybrid model might be your ideal solution.

Balancing these factors can help you decide if remote work aligns with your business and operational goals. And here’s the thing: obviously, you can combat all of the above considerations with a thorough remote work strategy. But you must commit to creating a really solid employee experience – one filled with intentional hiring and retention strategies, data-driven decisions, and comprehensive performance management – to ensure your remote team runs smoothly. 

2. Define Productivity

Once you’ve determined fit, you’re ready to explore hiring strategies to build a productive remote team.

Your first step? Defining productivity. 

Productivity is not a one-size-fits-all concept, because what signifies high performance for one company can differ significantly for another. This variance extends across different departments and even from team to team within the same organization.

For instance, the sales team may measure productivity by the efficiency of closing deals and the ability to meet or exceed sales targets. In contrast, the software development team might prioritize the efficiency in developing and deploying software.

Tip: Use a clear and tailored definition of productivity to pinpoint the specific skills needed for each position. This will ensure that candidates are well-suited for the role and create the framework for effective goal-setting and performance evaluations after onboarding.

3. Expand Your Reach And Increase Diversity

One of the most significant advantages of remote hiring is that you’re not limited to local boundaries like traditional hiring. You can hire individuals from different cities, states, and even other countries to access specialized skills and unique abilities that may be scarce or unavailable in your local job market.

Going beyond your usual candidate pool enhances the quality of your teams and introduces innovative thought processes that can drive your organization forward. Removing location barriers also promotes greater diversity, empowering you to hire remote employees from various cultures and infuse your workforce with various experiences and ideas.

Bringing together diverse talents under one virtual roof enriches your teams’ collective skillset and leads to more creative, dynamic, and effective solutions. Meta’s Chief Diversity Officer, Maxine Williams, highlights this advantage: “For the first time, we’re hiring individuals who are fully remote and working from locations where we don’t have offices, increasing the diversity of our candidate pool and workforce.”

Meta attributes its technological advancements and ingenuity to hiring people from various cultures and backgrounds, and eliminating their geographical constraints made it possible. While remote work offers immense benefits, it also raises the question: How do you ensure you’re hiring someone who is productive and will thrive in a remote work environment?

Implementing strategic hiring practices is essential to select candidates who possess the traits and skills necessary to increase your overall workforce productivity.

4. Ask The Right Questions

Asking the right questions is paramount to uncovering a candidate’s true potential. You want to ask thoughtful and targeted interview questions to help you choose the best employees.

Assessing a candidate’s productivity in a remote setting requires more than surface-level inquiries. You want to ask questions about how they manage their time, prioritize tasks, stay motivated, and overcome challenges without direct supervision.

Here are some essential interview questions to help you identify productive remote employees:

How did you organize your tasks on a typical day in your previous remote role?

This question provides a snapshot of the candidate’s daily routine and ability to structure their workday effectively. It also helps you understand their time management skills and how they maintain productivity.

How do you prioritize your tasks when you have multiple deadlines to meet?

Here, you can assess whether the candidate can create an effective framework to handle their workload. If their answer demonstrates strong prioritization skills, follow up with: “Can you describe how you would manage those deadlines without getting overwhelmed?”

Be sincere and assure them that you never want to hit their threshold. Your goal is to understand their capacity and how to best support them, ensuring they won’t burn out.

Can you provide a time when you had to stay focused to complete a project with minimal oversight?

Asking this question helps you evaluate the candidate’s ability to work independently and stay on track with limited external supervision. You can also ask how they hold themselves accountable for their work. 

Then, follow it up by asking for an example of when they took the initiative to improve a process without being asked. It’ll reveal if they have a proactive nature, a willingness to take ownership, and a strong sense of responsibility.

How do you handle feedback in a remote work environment and use it to improve your performance?

Since productive employees seek and utilize feedback to enhance their productivity, this question assesses whether they use feedback constructively. It also gauges their willingness to adjust and improve for better performance.

5. Nurture High-Performing Employees 

Hiring productive remote employees is only one part of the equation. Retaining and keeping them engaged for their employee lifecycle is another. 

Angelika Reich, a partner with McKinsey, calls high-performing employees “thriving stars,” and she suggests handling them with great care.

Reich states, “Thriving stars [are] the first people everyone is running to when there is a new project or an additional initiative or something to take on. Because they’re the ones who are going to overdeliver. So to deal with thriving stars, it’s important to provide development opportunities for them, to give them the appreciation they need, and to really care about them.”

In other words, it’s essential to review your remote work strategy to retain these valuable team members and ensure it’s designed to nurture productivity and engagement. 

Ask yourself:

• Does your strategy genuinely connect with your people?
• Is it set up to establish effective communication across the team?
• Does it promote employee well-being and work-life balance?

Addressing these questions helps create an environment where productive remote employees feel valued and supported. As your company, industry, and work in general continue to evolve, it’s crucial to adapt your remote work strategy to support your employees and their experience with your organization.

6. Celebrate Productive Traits

Productivity in remote work isn’t merely logging long hours or completing a week’s worth of tasks in a few days. Instead, productivity centers on employees effectively managing their time, prioritizing tasks, and contributing meaningfully to their teams. 

To help you identify truly productive remote employees, look for these characteristics:

• Prioritization: A key trait of productive remote workers is their exceptional ability to prioritize tasks effectively. They discern which tasks are most critical and address them first. They understand the bigger picture and align their daily activities with their team’s goals, ensuring their efforts contribute directly to the organization’s success.

• Disciplined and self-motivated: Productive employees’ discipline distinguishes them from their peers. They possess a strong drive that keeps them focused and engaged. They set goals for themselves, seek out challenges, and take initiative. This proactive mindset boosts their performance and can inspire their colleagues.

• Tend to observe problems for solutions: Productive employees can focus on solutions instead of dwelling on problems. They proactively approach issues with critical thinking, enabling them to navigate obstacles and maintain progress on their projects.

• Desire to continuously improve: Another key trait of productive remote employees is their dedication to ongoing and professional growth. They consistently seek feedback and learning opportunities and adapt well to new tools and methodologies that enhance their performance. Their commitment to self-improvement ensures they remain valuable assets to the organization.

• Quickly regain focus: We’ve all had a bad day before, but what truly matters is how we pull ourselves together to continue the week positively. Productive employees embody this resilience and swiftly regain their focus after setbacks. When they get off track, they’re back on course quickly. They also do their best to minimize distractions to ensure their overall productivity isn’t derailed.

Tip: While it’s recommended that you celebrate your employees and their achievements regularly, make sure you appropriately budget in your compensation plan to reward them monetarily, too. Otherwise, top talent—with limited opportunities for growth—may walk out the (figurative) door. 

Make Hiring and Retaining the Right People Part of Your Remote Work Strategy

Remote work boosts diversity, bringing new perspectives to your organization that enhance productivity. To sustain this advantage, it’s imperative to understand what productivity looks like for your company and select candidates who align with that vision. 

By asking the right questions and identifying the common traits of productive remote employees, you can assemble a team of motivated individuals eager to get the work done and more.

Of course, your work isn’t done; you must nurture these high-performing employees and create a positive work environment that will help them thrive and bring success to their team and your organization. 

The post 6 Strategies for Hiring and Retaining Productive Remote Employees appeared first on PrimePay.

And that last piece – closing the books and handling your end-of-year reporting – can be a doozy. That’s because HR and payroll teams must prepare for the year’s end, comply with tax laws, and plan for the next annual payroll. 

A great way to make sure you’ve crossed all your t’s and dotted your i’s is to follow a payroll checklist. By following a year-end payroll checklist, you can better track employee pay, manage deductions, and review payroll data. The results? Your business remains compliant, employees are paid accurately, and tax obligations are met.

Grab your free year-end payroll checklist to stay on track through the new year.

1. Prepare for Year-End Payroll

To prepare for your year-end payroll, there are three primary steps to complete including data verification, payroll provider coordination, and fringe benefits reporting. We will cover each of these in more detail below.

Verify Employee and Contractor Information

In the best-case scenario, you’ve maintained accurate employee and contractor information throughout the year. Doing so will make your Q4 smooth sailing and ideally prevent expensive delays and penalties with tax authorities. 

If you’re not up-to-date, make sure you:

• Confirm employee data, including full names, social security numbers, addresses, and other essential details.
• Verify contractors’ tax ID numbers using Form W-9.
• Update your records if discrepancies are identified.
• Inform your payroll service provider of any modifications.

TIP: Store your payroll records and tax forms for at least four years to stay compliant with legal obligations and avoid potential penalties. It’s also good to store these records digitally for easy access and streamlined record-keeping.

Coordinate with Your Payroll Provider

Maintaining an open dialogue with your payroll provider aids in accurate year-end payroll processing, prevents delays, and helps avoid expensive errors. Contact your payroll provider before the last payroll of the calendar year to discuss the following:

• Processing the final payroll.
• Any pay date changes due to holidays.
• Tax withholdings, employee contributions, and other essential payroll adjustments.

When processing year-end payroll, consider the processing time and method to ensure you hit deadlines and pay your people in a timely manner.

Manage Fringe Benefits and Third-Party Payouts

Maintaining compliance and avoiding potential tax penalties requires accurately reporting fringe benefits and third-party payouts.

• Submit fringe benefits – such as health insurance coverage and retirement contributions – to your payroll provider no later than your last scheduled payroll of the year. 
• Report the fair market value of these benefits on the employee’s W-2 form, ensuring all tax liabilities are accounted for.
• Provide details of any third-party disability payments to your payroll provider. 

After running the final payroll of the year, verify that all employee wages and deductions are accurate before reporting on the W-2 form.

2. Navigate State Reporting Requirements

Each state has its rules and regulations, making handling state reporting requirements a bit of a mess if your employees are dispersed.

• Wage-and-hour requirements
• Withholding and tax reporting
• Unemployment tax reporting
• Specific local regulations

The differences between states are vast and varied, so you must familiarize yourself with the specific requirements of each state you operate in.

However, ignoring these requirements can lead to severe consequences, including financial penalties, interest charges, and potential legal repercussions. 

State-Specific Regulations

State-specific regulations can be as varied as the landscapes of the states themselves. Take California, for example. Employers with 100 or more employees have to report pay and hours worked data by establishment, and all employers have to report new or rehired employees to the New Employee Registry within 20 days of their employment. In addition to these state-specific regulations, employers must comply with the Fair Labor Standards Act and relevant labor laws.

Meanwhile, in Texas, there are distinct state payroll tax forms that employers can access on the official website of the Texas Comptroller of Public Accounts. Think of it as each state having its own unique guidebook that employers must understand and follow.

TIP: Keep your state information in one place for quick reference and up-to-date resources. Or, bookmark our Wage and Tax Resources for a convenient one-stop-shop of federal and state-specific information.

Tax Compliance Strategies

With each state having its rulebook, it’s crucial to have a game plan for compliance. Some strategies to employ include:

• Registering with the appropriate state government.
• Ensuring accurate calculation and withholding of federal and state payroll taxes.
• Reporting these taxes to the relevant government agencies.

But remember, failing to comply with state payroll reporting requirements can lead to severe consequences, including late fees, interest charges, fines, and, in certain instances, felony charges and imprisonment. 

The right payroll software gives you a birds-eye view of where your people are – literally. Keeping employee addresses up-to-date makes payroll management that much easier come tax season.

3. Distribute W-2 and 1099 Forms to Your Employees and Contractors

Business owners must complete and distribute W-2 and 1099 forms to employees and contractors by January 31. These forms report the employee’s wages, tax withholdings, and other essential payroll information for the calendar year. 

Once you’ve provided W-2 and 1099 forms to your employees, submit them to the appropriate tax authorities, such as the SSA and IRS. Submitting these forms on time is necessary to prevent penalties and remain compliant with federal and state tax laws.

For independent contractors, you must send Form 1099, which documents payments for services provided during a specific pay period. It’s a crucial step in reporting any amount of federal income and fulfilling tax reporting obligations.

However, this form comes with its own set of details. You need to have the contractor’s name and address, their taxpayer identification number (TIN), and the total amount paid to the contractor during the tax year. Consider it a to-do list to complete before handing out Form 1099. 

Again, you must distribute both electronic and paper records of W-2s and 1099s by January 31. Delayed distribution can result in penalties ranging from $60 to $310 per form, a price you don’t want to pay.

TIP: If the worst-case scenario occurs – you forget to file or have incorrect W-2s – there are steps to take to mitigate the damage (unfortunately, building a time machine isn’t one of them). 

Using an employee self-service portal allows employees to update their information and see tax documents in one place.

4. Meet Deadlines and Maintain Compliance

An integral part of your year-end payroll checklist is staying versed on essential payroll forms and deadlines. In short, your business must complete, file, and submit applicable payroll tax forms to the IRS, SSA, state tax authorities, and other relevant entities. 

Tax Forms and Filing Deadlines

Staying informed about tax forms and filing deadlines is essential for any business, especially in Q4. In addition to W-2 and 1099 forms, companies must file the following documents, each with its distinct filing deadline:

1. Form 940, which reports federal unemployment tax, is due by January 31.
2. Quarterly Form 941, which reports federal income tax, Social Security, and Medicare taxes, is also expected by January 31.
3. Annual Form 944, which reports federal income taxes, Social Security, and Medicare taxes, is due by January 31.

Keeping track of these tax forms and filing deadlines can help your business remain compliant, avoid penalties, and maintain precise accounting records.

ACA Reporting Requirements

When it comes to ACA reporting, being well-informed is your strongest defense. Applicable Large Employers (ALEs) need to provide the IRS with details regarding the health care coverage offered to full-time employees, adhering to guidelines set by the Equal Employment Opportunity Commission. 

This step is where Forms 1094-B and 1095-B, as well as 1094-C and 1095-C, come into play. They are your allies in reporting this information and keeping your payroll records in check.

• IRS Form 1094 consolidates the information returns of Form 1095 and provides details about employee eligibility for tax credits.
• IRS Form 1095 reports information about individuals who enroll in a qualified health plan through the Health Insurance Marketplace.

These forms come with a deadline. For paper filers, they must be submitted by February 28, 2024, or March 31, 2024 if you’re filing electronically. Make sure you mark these dates on your calendar to keep your reporting process smooth sailing. If you fail to submit these forms by the deadlines, you could face penalties ranging from $280 to $580 per return. 

TIP: Managing compliance isn’t an easy feat. Let your payroll provider navigate and file compliance forms to reduce manual errors and missed deadlines.

5. Update Payroll Policies

As the year-end approaches, it’s essential to review your payroll structure and policies and comply with federal, state, and local labor laws. 

Review Payroll Structure and Policies

Evaluating your first payroll structure and policies is vital to ensure accurate tax withholding and adherence to federal regulations. Consider any changes needed for the upcoming year, such as pay-on-demand or paycheck delivery options. Adjustments to your payroll policies can better accommodate your employees’ needs and guarantee an effortless payroll process in the upcoming year.

Don’t forget to stay informed about changes in state and local minimum wage laws or health insurance coverage options, as these factors can impact your employee compensation plans.

The right payroll software allows you to adjust your payroll schedule to suit your organization’s needs.

Plan For Holiday Scheduling Challenges

Federal holidays can be a double-edged sword. While they bring joy and relaxation, they can also challenge payroll processing and create some late nights. 

By following these steps, you can make sure your payroll tasks remain uninterrupted:

1. Set or modify a pay schedule.
2. Recognize holiday dates for adjustments.
3. Notify employees about changes in advance.
4. Update contracts for new hires.
5. Smoothly transition from the old to the new plan.

It’s advisable to adjust payroll schedules for holiday periods when the regular pay date coincides with a weekend or a bank holiday. Make these adjustments in advance to ensure punctual payment to employees. 

Disseminate Compliance Posters and Regulations

No, those compliance posters aren’t hanging in the office breakroom for light reading. Maintaining compliance with federal, state, and local labor laws is crucial to avoid fines, fees, and potential lawsuits. 

Keeping your compliance posters current and staying updated about the latest labor laws can protect your business from potential legal problems and foster a safe and compliant work environment for your employees.

Establish Deposit Schedules

Determining your deposit schedule for the new year is essential to ensure timely tax payments and prevent penalties (is it clear that we want 2025 to be a penalty-free year?). Match your deposit schedule with tax deadlines and adjust as needed to comply with federal and state tax laws.

6. Align Year-End Accounting Procedures and Business Goals

As the year winds down, it’s vital to focus on organizing your accounting records and setting goals for the upcoming year. 

Clean Up Accounting Records

One part of your year-end financial review is cleaning up your accounting records. Plan to:

• Clear up any irregularities in outstanding invoices.
• Remove unused or closed accounts.
• Clear any deposited funds to maintain accurate accounting records.

You can ensure a solid financial foundation for the new year by addressing discrepancies in your accounting records.

Besides cleaning up your records, you’ll want to stay updated about any changes in tax laws and regulations that may affect your business. These changes will keep your finances on track (and, once again, avoid those penalties).

Tie Business Goals and Employee Feedback Together

Setting business goals is vital in planning for the upcoming year and driving growth and improvement. Equally important is having your team make these plans become a reality. As your organization develops goals for 2025, consider how you can integrate these goals into performance management. Providing feedback to encourage growth and development is essential.

Offering employee feedback helps ensure your team members know their performance and how they contribute to the organization’s success. Fostering a culture of continuous improvement can contribute to growth and success in the new year.

When performance evaluations live in cloud-based software, you provide a more equitable and transparent experience for leadership, managers, and direct reports. 

Following a comprehensive year-end payroll checklist can provide a smooth transition into the new year and set your business up for success. With the above steps, you’ll be well-prepared to tackle the challenges and opportunities in the new year.

If you want to add one more item to your checklist, consider switching to a payroll provider that includes human capital management so all your people and compliance needs are in one place.

The post Year-End Payroll Checklist for Businesses appeared first on PrimePay.

The annual deduction limit on HSA contributions for a person with self-only coverage under a High-Deductible Health Plan for calendar year 2025 is $4,300 (up from $4,150), and a $8,550 (up from $8,300) annual deduction limit for a person with family coverage in a HDHP.

Before we dive deeper into the 2024 – Present Revenue Procedures, the following is a brief refresher on HSAs.

HSAs Explained

As explained by the IRS, a Health Savings Account (HSA) is a tax-advantaged trust or custodial account you set up with a qualified HSA trustee to pay or provide reimbursement for certain medical expenses you incur. In other words, the HSA was designed to pay for day-to-day medical costs via HSA funds that an individual or family member may incur while remaining tax-free.

The account is owned by the employee and money is deposited directly into the individual’s account.

Employees may make contributions in the form of lump sum contributions or pre-tax payroll deductions. An employer may also contribute to the account.

As soon as funds accumulate, they are available. This differs from a health flexible spending account (FSA) that has uniform coverage, in which the full balance is available on the first day of the plan year.

HSA Tax Penalties

HSAs offer numerous tax benefits, but it’s important to understand the potential tax penalties associated with these accounts. One such penalty applies to excess contributions, which are contributions made above the annual contribution limit.

If employees contribute more than the allowable limit, you will be subject to a 6% excise tax on the excess amount. Additionally, any excess contributions made are considered taxable income in the year they are made. It’s important to educate your employees to keep track of contributions to avoid exceeding the limit and incurring these penalties.

Another tax penalty pertaining to HSAs relates to using the funds for ineligible expenses. Using HSA funds for non-qualified expenses before the age of 65 will lead to a 20% penalty on the amount used for such expenses. This penalty is in addition to any income tax owed on the withdrawn amount.

After the age of 65, the penalty for using HSA funds for ineligible expenses is reduced to the ordinary income tax rate. However, it’s essential to note that even after the age of 65, using HSA funds for ineligible expenses will still result in taxable income.

To avoid tax penalties, it is crucial to provide the proper information for employees to familiarize themselves with the eligible expenses for HSA funds and ensure that contributions do not exceed the annual contribution limit. By understanding these tax penalties, users can maximize the potential tax savings offered by HSAs.

Annual Contribution Limits for 2025

It’s never too early to start thinking about future medical expenses, tax saving opportunities, and saving for retirement.

Remember, HSA contributions may be made through pre-tax salary reductions and/or on a post-tax basis, up to the maximum limit for that year. Post-tax contributions may be made up until the date an individual’s taxes are due.

Please read our disclaimer here.

The post HSA Contribution Limits for 2025 appeared first on PrimePay.

You also want to keep your company and employee information safe. However, according to a study by MoorePay, there’s been a 67% increase in a return to outdated payroll service solutions that use paper, telephone, or email input. 

The issue? These manual services make organizations susceptible to payroll scams, which are still on the rise (the FTC received roughly half a million reports of business and government scams in 2023, costing companies $1.1 billion). 

That’s why choosing a solution is incredibly important—it needs to align with your budget and organizational needs and be safe and secure, as it involves highly sensitive information. Because there’s much to consider when adopting a new service, we’ve broken down the different types and recommendations according to business size. 

Types of Payroll Services

When it comes to payroll, businesses have several options depending on their size, resources, and complexity. But we’ll be honest – there’s not a perfect payroll solution. Instead, each selection has benefits and drawbacks, and it’s up to you and your team to determine which is most appropriate for your business.

Let’s take a look at the most common types of payroll services available today:

Manual In-House Payroll

This method involves handling payroll manually, often through spreadsheets or handwritten records. Employers are responsible for calculating wages, taxes, and deductions, ensuring they file everything correctly and on time.

The Rose: Manual in-house payroll can be cost-effective, especially for very small businesses with just a few employees. You maintain full control of the process, and there’s no need to invest in third-party software or services.

The Thorn: As your business grows, manual payroll becomes time-consuming and error-prone. You’ll need to keep up with tax law changes, which can be challenging if you’re not constantly reading up on the newest rules. As you likely know, tax filings or compliance mistakes can lead to costly penalties and fines.

Bookkeepers

Some small to medium-sized businesses outsource their payroll duties to a bookkeeper. Bookkeepers handle day-to-day financial tasks (including payroll), saving business owners precious time and reducing the risk of errors.

The Rose: Bookkeepers offer more expertise than manual in-house payroll, especially when it comes to organizing records, calculating payroll, and ensuring taxes are filed on time. It’s a relatively affordable option for small businesses and provides some peace of mind.

The Thorn: Bookkeepers may not have the deep payroll-specific knowledge needed for complex tax issues, benefits management, or compliance with multi-state regulations. As your business grows, you might find that a dedicated payroll service is more suited to your needs.

CPAs

Certified Public Accountants (CPAs) are often hired to manage payroll, particularly for businesses that combine payroll services with accounting and tax planning. CPAs are well-versed in tax regulations and can offer guidance on how payroll impacts overall financial strategy.

The Rose: CPAs bring a high level of expertise and can ensure compliance with tax laws. They’re particularly helpful for businesses with complex payroll needs, like multi-state operations or special tax requirements. Their ability to handle accounting and payroll as a unified service adds value.

The Thorn: Their services tend to come with a higher price tag, which might be a barrier for smaller businesses. CPAs are best suited for larger organizations or those with more complex financial needs that justify the cost.

PEO (Professional Employer Organization)

A PEO offers a more comprehensive solution, co-employing your staff and taking over the management of payroll, HR, benefits, and compliance. Essentially, the PEO becomes the employer of record while you focus on running your business.

The Rose: PEOs are ideal for businesses looking to outsource a wide range of HR functions, not just payroll. They handle everything from benefits management to compliance with employment laws, providing a one-stop solution that can save time and reduce risk.

The Thorn: When partnering with a PEO, you’re giving up a certain level of control. While they manage many day-to-day HR functions, businesses may have less flexibility in choosing vendors or implementing specific policies, which might not suit every company’s culture or operational style.

Payroll Software Providers

Payroll software providers offer a great balance for businesses wanting to streamline payroll while maintaining control. These platforms automate payroll calculations, tax filings, and direct deposits, reducing the risk of human error and ensuring compliance. Most payroll software solutions are scalable, making them suitable for businesses of various sizes.

The Rose: Payroll software automates many time-consuming tasks, reducing the risk of errors while ensuring taxes and deductions are calculated accurately. These platforms often integrate with other HR tools like time tracking and benefits management. They also provide flexibility, offering control while automating routine tasks.

The Thorn: While payroll software providers are cost-effective, they still require some level of management. You’ll need your company’s personnel to oversee the process, input data, and ensure accuracy. Additionally, mistakes can still occur without expert oversight if the software isn’t set up or used correctly.

Payroll Companies

Payroll companies provide fully outsourced payroll solutions, managing everything from calculating wages and taxes to issuing payments and filing returns. This option takes payroll management completely off your plate, which can be a relief for business owners focused on growth.

The Rose: Payroll companies offer a hassle-free solution for managing payroll, ensuring everything is done accurately and on time. They handle tax filings and direct deposits and confirm compliance with federal, state, and local regulations. Outsourcing payroll to a company provides peace of mind for businesses looking to focus on their core operations.

The Thorn: A full payroll service comes with a higher cost, which may not be suitable for startups. Additionally, if the payroll company makes a mistake, it can reflect poorly on your business, even if you weren’t directly responsible.

How to Choose a Payroll Solution

According to a study by MoorePay, UK businesses reported 73% more frustrations with their payroll process in 2023 than in previous years, yet many are reluctant to switch providers due to the economic climate. Unfortunately, clunky or error-prone payroll processing can set finance teams up for failure, especially as the business grows and payroll needs become more complex. 

Therefore, whether you manage a small team or oversee multiple locations, finding the right fit can save you time, reduce costly errors, and ensure compliance with tax regulations.

Here’s a breakdown of which payroll options might work best for small businesses, medium-sized companies, large organizations, and franchises.

Small Businesses

For small businesses, cost and simplicity are usually top priorities. Manual in-house payroll might be an option if you’re running a very small team, especially if your payroll needs are straightforward. However, errors and compliance issues can become more frequent as your business grows.

A better option for small businesses is a bookkeeper or payroll software provider. Bookkeepers can manage payroll alongside other financial tasks, while payroll software automates the process, offering affordability and convenience. 

Medium-Sized Businesses

As businesses grow, so do their payroll needs. Medium-sized businesses usually need more robust solutions that ensure compliance with tax laws and reduce the administrative burden. CPAs can be a good fit for handling payroll while offering accounting and tax expertise.

Alternatively, payroll software providers are a scalable option for medium businesses. Software solutions can handle the increasing complexity of a larger workforce and multiple tax jurisdictions. Many payroll software platforms also integrate with HR and benefits systems, making managing payroll and employee needs easier in one place.

A system that integrates with benefits management increases enrollment accuracy and helps employees make changes easily, without assistance from HR teams. 

Large Organizations

Larger businesses often face complex payroll needs, including multi-state tax filings, detailed reporting, and benefits administration. Payroll companies offer fully outsourced solutions, taking care of every aspect of payroll, from tax compliance to issuing payments. This allows larger organizations to focus on their core operations while ensuring payroll is handled smoothly.

Large organizations might opt for a PEO for even more comprehensive HR support. By partnering with a PEO, businesses gain access to a full suite of HR, payroll, and benefits management services, helping them streamline operations and stay compliant with employment laws.

When your payroll and HR software integrate seamlessly, your data is centralized, and you gain deeper insights into your workforce. 

Franchises

Franchises have unique needs, especially when it comes to managing payroll across multiple locations. PEOs are often a great choice for franchises, as they can provide consistent payroll and HR services across the entire organization – confirming that all franchise locations remain compliant with payroll and tax laws, regardless of location.

Another option for franchises is payroll companies, which can handle multi-location payroll, offer detailed reporting, and ensure compliance with local and federal regulations. These complete payroll solutions are especially useful for franchisors who want to centralize payroll while allowing franchisees to focus on business operations.

Chose the Right Solution for Your Current and Future Needs

While it’s not hard to switch your payroll provider, it’s also not a walk in the park, meaning you don’t want to do it every year as your business grows. Instead, forecast your budget, headcount, and overall expansion to ensure the payroll service you choose now will also be compatible with your needs down the road. 

Your best bet is to adopt a solution that grows with your needs and integrates payroll, HR, and compliance so checks and taxes are right, HR processes are fast and simple, and employees and candidates feel connected.

The post Understanding Payroll Service Solutions appeared first on PrimePay.

Business owners need to move fast to support their team members, but must also remain compliant with federal regulations they’re not familiar with. Yikes. While they can’t build a time machine to prevent this frantic feeling, you can learn from their mistakes and prepare yourself for the future. 

Below is an overview of FMLA. We cover your responsibilities as an employer, and helpful steps to create an FMLA policy to maintain compliance and support your people. 

What is FMLA?

The Family and Medical Leave Act (FMLA), is a federal law under which eligible employees are entitled to up to 12 work weeks of unpaid, job-protected leave within a 12-month period for specific family and medical reasons.

An employee can take their available FMLA leave consecutively or schedule intermittent leave to help balance their work and family responsibilities.

By providing this unpaid job-protected leave, the FMLA supports employees in managing significant life events while maintaining their employment status.

One of the FMLA’s cornerstone provisions is the guarantee of job restoration. When an employee returns from FMLA leave, you must reinstate them to the same position they held before the leave or to an equivalent position with the same wage, benefits (like health insurance coverage), and other terms of employment. This rule ensures that if FMLA leave is taken it does not disadvantage the employee in their career progression. 

FMLA violations by employers include interfering with, restraining, or denying the exercise of these rights and any form of retaliation.

Does FMLA Apply to Small Businesses?

FMLA applies to private-sector employers with an average of 50 or more employees for 20+ weeks in the current or prior calendar year. 

It also applies to all public and local educational agencies, regardless of their number of workers.

State Paid Family Leave Laws

Just because you, as the employer, may not qualify for FMLA doesn’t mean your company can ignore state paid family medical leave laws. 

Thirteen states, as well as Washington D.C., have mandatory paid family leave systems.

The states with mandatory laws are California, Connecticut, Massachusetts, New Jersey, Rhode Island, Washington, Colorado, Delaware, Maine, Maryland, Minnesota, Oregon, and New York. New York uses a mandatory private insurance system, meaning the state requires insurers to purchase paid leave plans that offer coverage. 

Nine other states have voluntary systems that provide paid leave through private insurance. Because laws and benefits regularly change, it’s important to stay up-to-date on your state’s requirements. 

For more information on the status of state-level family leave policies and programs, visit Bipartisan Policy Center.

How to Calculate Employees

Below are a few tips to ensure your calculations are accurate and that you maintain compliance with FMLA requirements. 

• To determine the number of workers employed each week of the year, employers must include all employees listed on the payroll who worked any part of each working day, even if they weren’t paid during that time. This includes full-time, part-time, seasonal, and variable-hour employees.
• Each employee is counted as a single employee towards the 50-person threshold. This means that part-time workers are not counted as fractional employees as they are for COBRA and ACA purposes.
• Related employers, sometimes called integrated employers, must aggregate their total employees to determine FMLA applicability. If, as a group, they have more than 50 employees for at least 20 weeks in the current or previous year, they all have to follow FMLA requirements.

FMLA Qualifications

To be eligible for FMLA leave, an individual must be considered a qualified employee. This means that, before their protected leave starts, they have worked for a covered employer for at least 12 months cumulatively, for at least 1,250 hours. 

In addition, their employer must employ at least 50 employees within 75 miles of the workplace at which the employee works.

How Employees Can Use FMLA

Only certain situations make an employee eligible for FMLA leave.

• The birth and care of a newborn child;
• Placement of a child for adoption or foster care;
• To care for a family member with a serious medical concern;
• To care for oneself when the employee has a serious health condition;
• Due to a ‘qualifying exigency’ due to a family member’s active duty status in the Armed Forces
• To care for a ‘covered service member’ with a serious injury or illness.

The Department of Labor (DOL) has defined a ‘serious health condition’ as an illness, injury, impairment, or physical or mental issue that involves either: 

1. Inpatient care in a hospital, hospice, or residential medical care facility; or 
2. Continuing treatment by a healthcare provider

Employee Notice Requirements

Because FMLA is a federal law, it comes as no surprise that there are strict guidelines for requesting FMLA leave. When you create your organization’s FMLA policy, make sure the notice requirement is clear to prevent any miscommunication and missed opportunities for your employees. 

• Employees must: notify their employer when requesting leave and provide certification of the need for FMLA leave within 15 calendar days of the employer’s request. Note that the certification must be completed by a healthcare professional and must include the dates of treatment, the nature of the condition, and the expected duration of the treatment. Employees may be required to provide additional information or documentation to support their request for FMLA leave.
• Employers must: respond to the leave request within five days. 

Can FMLA Requests Be Denied?

Yes, requests for FMLA (Family and Medical Leave Act) can be denied, but only under specific circumstances. 

Some common reasons for denial are:

• Ineligibility: If the employee hasn’t worked for the company for at least 12 months, hasn’t worked 1,250 hours in the past 12 months, or if the company has fewer than 50 employees within a 75-mile radius, the employee is not eligible for FMLA leave.
• Insufficient notice: Employees must generally give 30 days’ notice for foreseeable leave. If they fail to do so without a good reason, the employer may deny the request.
• Lack of medical certification: If the employee doesn’t provide the necessary medical certification to support their leave request, the employer can deny it until the certification is provided.
• Exhausted leave: FMLA allows up to 12 weeks of unpaid leave in a 12-month period. The employer can deny additional requests if the employee has already used up their FMLA leave for the allowed period.

How to Create an FMLA Policy

Developing a well-structured FMLA policy is a critical step for HR leaders to ensure both legal compliance and smooth administration of employee leave. Including this guideline in your employee handbook sets clear expectations, fosters transparency, and minimizes the risk of misunderstandings or legal issues down the line. 

Below are eight steps to help you form your organization’s policy if your company meets the requirements.

1. Establish Your 12-Month Measurement Period

FMLA allows for up to 12 weeks of unpaid leave. Employers can choose how to measure their 12-month FMLA period. The four common methods include:

• Calendar year
• Any fixed 12-month period (e.g., anniversary date)
• The 12-month period starting from the first day an employee takes FMLA leave
• A rolling 12-month period measured backward from the date of leave

Decide which option works best for your organization and ensure it is consistently applied across the board.

2. Determine Your Leave Request Method

Clearly define the process for requesting FMLA leave to ensure effective communication. Outline how employees should notify HR or management (e.g., written requests, specific forms). Specify deadlines for notice, especially for foreseeable leave, and set expectations for what information employees need to provide when requesting FMLA.

3. Include Qualifying Reasons for FMLA Leave

You should list the conditions that qualify an employee for FMLA leave. These conditions generally include:

• Serious health issues affecting the employee or a close family member
• Childbirth, adoption, or foster care placement
• Certain military-related absences 

Provide examples and details to minimize any confusion about eligibility.

4. Display the Notice of FMLA Rights

Ensure compliance by posting the required Notice of FMLA Rights in a visible area, like a breakroom or common area. Doing so fulfills a legal requirement and informs employees of their rights under the law.

5. Outline How Benefits Premiums Will Be Collected

Employees on FMLA leave are entitled to maintain their health benefits. You should explain how benefit premiums will be paid during leave (whether through payroll deductions before leave or another method. Additionally, address what happens if an employee fails to return from leave and how long benefits will continue to be offered.

6. Designate Paid vs. Unpaid Leave Options

FMLA is typically unpaid, but your plan can specify conditions under which employees can substitute paid leave (e.g., sick leave, vacation time) for part or all of the FMLA leave period. Be clear about how accrued paid time off (PTO) or other benefits can be used to supplement unpaid leave.

7. Implement HIPAA-Compliant Procedures for Handling PHI

When processing FMLA requests, it’s likely you’ll receive Protected Health Information (PHI) through doctor’s certifications or other medical documentation. To protect this sensitive information, include a HIPAA Authorization form in your plan. This form ensures that your company can lawfully obtain, use, and store health information related to an employee’s FMLA leave while respecting privacy regulations.

Make sure your plan covers the following:

• Collection of HIPAA authorization: Require employees to sign a HIPAA Authorization form if they submit medical documentation for FMLA purposes. Explain that this document allows you to handle health information strictly for the FMLA process.
• Secure storage and access: Describe the protocols for securely storing PHI, whether in physical or digital formats, and outline which team members have authorized access to this information.
• Guidelines for sharing information: Clearly state that PHI will only be shared as necessary and in compliance with HIPAA. For example, FMLA information might only be accessible to HR and specific managers involved in the leave process.

Implementing these HIPAA-compliant steps in your FMLA policy helps protect employee privacy and keeps your company compliant with both FMLA and HIPAA regulations.

8. Establish Communication Guidelines for Employees on Leave

Maintaining open lines of communication with employees on FMLA leave is crucial. Outline expectations regarding periodic updates on their continuous or intermittent leave status and their return-to-work date. Make sure employees know how often they need to check in, if applicable, and if they need to provide additional medical certifications during extended leave.

9. Create a Return-to-Work Process

Your should also address how employees will be reintegrated once they return from FMLA leave. In most cases, employees are entitled to be reinstated to the same or an equivalent position. Outline any necessary steps, such as fitness-for-duty certifications or missed training, and ensure that employees understand what will happen when they return—whether they will resume their previous role or be reassigned to an equivalent one.

Maintain Compliance and Support Your Employees

While there are numerous rules and regulations for FMLA, navigating it as an employer or employee doesn’t need to be (and shouldn’t be!) confusing. By understanding the ins and outs of FMLA, as well as creating a clear organizational policy, you’ll feel more comfortable making decisions and supporting employees, all while maintaining compliance. 

The post FMLA Small Business Requirements appeared first on PrimePay.

The Society for Human Resource Management (SHRM) reports that 42% of employees who experience a negative work culture consider leaving, while only 9% of those with a positive experience feel the same.

It stands to reason that companies should prioritize collecting information and designing programs to improve EX, right? Well, our 2024: The Role of Data and Tech in the Employee Experience report shows that only 20% of businesses collect employee experience data on a frequent basis. 

This number is not high enough. Every company must prioritize EX to ensure a strong foundation of teamwork and company commitment in a competitive marketplace.

What is Employee Experience?

Employee experience includes all interactions employees have with your business, from recruitment and onboarding to their eventual departure. This process includes the job application, performance assessments, exit interviews, and any other interactions (in-person or online) they have with others at your company. 

Why is EX So Important?

You’re buried in EX every day. No one knows better than you that a poor or excellent EX directly influences:

• Corporate culture
• Employees’ perception of leadership and their decisions
• Employee retention and growth
• Company revenue, efficiency, and innovation

The degree to which your organization improves EX will determine the investment you must make in hiring and rehiring employees rather than retaining, growing, and upskilling them.

Improving the employee lifecycle can have a ripple effect on talent acquisition as well. We all know top talent today is in high demand — the companies that land these high-performing individuals are the ones that are laser-focused on building a positive and inclusive EX. 

Consider the following data:

• SHRM found that employees with a positive EX are 68% less likely to think about leaving the company. Considering that voluntary staff turnover costs the private sector a trillion dollars each year, improving retention can make a massive difference for your bottom line.
• EX is even more important when we look at people’s attitudes towards their current jobs. Fifty-one percent of employees in the U.S. say they’re looking for a new job, yet studies show that 42% of turnover is avoidable with just a little more proactive effort from leadership. 
• A positive EX can also reduce the cost per hire. Currently, U.S. businesses spend $4,700 for every new employee they bring into the business. EX can reduce some of these costs by helping you build a strong employer brand that attracts referrals and word-of-mouth.

All of these factors make employee experience important and relevant for any modern-day organization. And just as you can carefully design and curate the customer experience (CX), you can also create a purpose-built employee experience framework that serves as a guidepost for all employee interactions with each other and the business.

Employee Experience Challenges

Before we dive into strategies on how to improve EX, let’s first acknowledge that getting EX right is hard work and fraught with obstacles. Below are some of the most common struggles you may face and some options to address them.

Compensation Expectations

Compensation packages are a common contention point between employees and their leadership team, especially when there’s a discrepancy between what the employee desires and what you as an employer can offer. This misalignment can, of course, reduce their job satisfaction.

One way to circumvent this challenge is to simply be transparent about pay from the outset. Salary range transparency laws accomplish this while aiming to close the gender pay gap. But other transparency methods, like providing aggregate salary information or offering a percentage range of possible salaries, can increase employee performance just as much without necessarily revealing individual salary figures. 

Employee Burnout

Another real threat to EX is burnout. Seventy-seven percent of employees say they’ve experienced burnout in their current job, and 91% say that it impacts the quality of their work. 

Corporate culture plays a big role in inspiring positive behaviors that keep burnout at bay. For example, the above study says leadership’s lack of recognition and support is one of the top reasons burnout can run rampant and unchecked. Also, adjusting company attitudes towards time off and encouraging your teams to “switch off” after work (and avoid those 8pm Slack requests) reduces exhaustion and disengagement.

Disconnected Employees

Almost a third (27%) of private sector employees in the U.S. work remotely either some or all of the time. While remote work gives employees flexibility and agency over their workday, it can also create a disconnect between themselves and the company. 

Companies that have embraced remote or hybrid work models should look at designing inclusive communication channels and processes that allow all employees to contribute, ask questions, and feel like they’re part of the team.

Conflicting Values

Employee attitudes are changing, and a good salary no longer cuts it when it comes to employee loyalty. In fact, 59% of professionals in Europe say they wouldn’t work for a company that doesn’t share their values.

Your corporate values matter, as does how your leadership team acts on them in the workplace. Be transparent about your values at work. Encourage ethics-based conversations with your employees and invite them to provide feedback and ideas to improve your processes and social and environmental responsibility.  

Evaluating Your Business’ Employee Experience

No improvements can be made to your existing EX until you understand how effective it already is — and where you are missing the boat. Since employee experience touches on every aspect of a person’s professional life, your evaluation should consider both the tangible aspects of EX (like opportunities for growth and career development), as well as intangible aspects (like the emotional impact of your leadership style and corporate culture). 

Here are some useful ways to understand how your employees feel at work and what you can do to improve that.

Measure Your Employee Net Promoter Score (eNPS)

Employee Net Promoter Score (eNPS) surveys are great for understanding the current state of your employee experience and any upward or downward trends throughout the year. The survey consists of only two questions that can easily gauge how loyal employees feel toward your organization at any given time: 

1. On a scale of 0 to 10, how likely are you to recommend our company as a place to work to a friend or colleague?
   
2. What’s the main reason for your score?

Shockingly, only 17% of HR leaders report an excellent eNPS score — something to keep in mind as you poll your own employees. No matter the result, tracking your NPS score regularly can give you a clear direction on what changes you need to make to improve it. And who knows, you may be pleasantly surprised.

Employee Satisfaction Index (ESI)

Unlike eNPS, which is geared more towards employee loyalty, Employee Satisfaction Index (ESI) surveys look at employees’ immediate satisfaction with specific aspects of their jobs. ESI surveys are usually more in-depth and include areas such as work-life balance, career development opportunities, leadership and management, and overall experience with team collaboration and communication. 

The questions you ask will depend on your organization’s needs, but here are some common ones you can use as a starting point. Where possible, try to steer towards open-ended questions to get more detailed and nuanced answers:

• How satisfied are you with your current job role?
• How effectively does your workspace support your productivity?
• Do you feel you have sufficient opportunities for professional growth?
• Do you feel a sense of belonging in your team?
• What changes would you like to see in the workplace?

If you haven’t done this kind of survey before and are looking to build your employee experience strategy, it may be useful to initially measure your ESI every quarter. Once you have a good pulse on how your employees feel, you can move them to an annual cadence. 

Stay Interviews

One-to-one interviews with employees who’ve been with the business for a while — known as Stay Interviews — can be excellent for uncovering ways to improve employee experience in your organization. They’ve especially grown in popularity in recent years, with 46% of nonprofit organizations saying they conduct stay interviews (as opposed to 33% in 2022).

“Stay interviews will not lead to perfect outcomes, but they will certainly improve engagement and retention in your company. And they will do this by helping your leaders build more productive one-on-one relationships with their employees,” says Richard P. Finnegan, author of The Power of Stay Interviews for Engagement and Retention.

These interviews look at how your employees feel at work, what they like or don’t like about it, and aspects of your work environment they’d change.

Exit Interviews

Exit interviews with employees who are about to leave the business are just as, if not more, valuable as stay interviews. Since they’re leaving your organization, these employees are usually much more transparent about their EX and can give you valuable feedback on how to improve it.

Only 30% of HR leaders actually use exit interviews as a strategy for collecting employee feedback. However, 54% of those who’ve updated their offboarding strategy in the last year say they’re adding exit interviews to their practice, further confirming their importance for HR teams.

How to Design an Employee Experience

Once you understand the state of the employee experience, you can start working on designing a better one. The first step is to create an employee experience strategy (if you don’t have one already) that examines the overall employee lifecycle and any areas you may be lacking. 

Once you know where you stand and where you want to go, you can start putting an action plan in place with specific tasks and timeframes.

Some of these changes might be substantial (like new technologies and workflows), while others can be small but just as impactful (for example, a suggestion box). The details of the adjustments you make will depend on your business, but here are some high-level things you can do to design an ideal EX for your workforce:

Map Out the Entire Employee Journey 

Before making any meaningful change, you must understand the processes employees go through from the first interview to the exit interview. Here, it’s a good idea to review the number and the types of interviews candidates have, the length and format of your onboarding process, the team-building elements you put in place for new hires to feel more welcome and comfortable, and the standards you have in place for promoting, increasing salaries, and making the day-to-day an enjoyable experience. 

Identify Data Gaps and Inconsistencies

As you analyze your employee journey, try to spot inefficiencies and areas where you may be missing key information. For example, do you find that your recruitment data lives in one system, benefits and compensation in another, and performance reviews in yet another? 

Data shows that almost two-thirds (63%) of organizations rely on spreadsheets and disparate systems for tracking and storing HR data. This is a staggering number, considering that data unity and transparency can inform better employee policies and, ultimately, a better employee experience. Investing in a dedicated HR software solution can be a true turning point for your team by consolidating data, providing reports, and giving you the tools you need to identify gaps and opportunities.

Introduce Incremental Changes

Once you’ve addressed the changes you want to make both within your processes and the employee journey itself, it’s time to take action. Create a plan with specific changes you can make immediately as well as in the mid-, and long-term future. 

Seventy-four percent of HR leaders believe change positively impacts EX — and these changes don’t have to be massive or expensive to be effective. For example, many organizations that are looking to improve EX focus on their recognition and rewards program (76%), improving internal communications (62%), and their employee resource groups (ERGs) (60%).

Consider Your Culture and Work Environment

As you work on your employee experience, don’t forget to zoom out and take in the wider organizational context in which these changes will exist.

Company culture plays a massive role in making employees feel a sense of belonging, and it’s something that you, as a leader, can influence directly. Consider the following:

• What behaviors does your leadership team exhibit? Are they in line with your values?
• What’s your corporate communication style?
• What opportunities do employees have to collaborate within and outside of their teams?
• What systems do you have in place to ensure your employees’ well-being?

Your work environment (both physical and digital) can also influence how employees feel at work. Some of the questions to consider here are:

• Is the office environment comfortable and conducive to productive behavior? 
• Have all employees had sufficient training on all digital tools and workflows? 
• Can some of these processes be simplified or made easier?

Your digital work environment is especially relevant for hybrid or remote employees for whom the digital workspace is their lifeline to the rest of the organization. Do your employees have the tools, access, and infrastructure they need to proactively contribute and collaborate on a daily basis? Check you have the right processes and requirements in place to ensure all of the bases are covered. 

The Evolving Nature of EX

The employee experience is never static. How your employees feel about working for you and what they expect from you as an employer will continuously evolve. That’s why it’s important to keep your finger on the pulse of employee satisfaction and take proactive action to make everyone feel welcomed, supported, and appreciated. This caring attitude is one of the best ways to ensure a productive and thriving workforce.

The post Build an Employee Experience That Drives Performance appeared first on PrimePay.

No matter your involvement with payroll at your business or organization, we have broken down some of the most common payroll definitions and terms to know. We have also included some of the most common payroll acronyms.

1. Accrue

Accrue means to build up or accumulate. As part of a compensation package, many employers offer paid vacation, sick, and personal time. There are many ways to provide this time, accruals being one of them. Many employers choose to allow the employee to earn (or accrue) a certain amount of time per pay period they work. Other employers may choose to give a bulk amount at one time.  

2. ACH (Automated Clearing House)

ACH is an electronic network for processing direct deposits and other payroll transactions. It is a safe way to transfer money between banks and credit unions and reduces the needs for paper and checks. Direct deposit for your payroll is an ACH.

3. Base pay rate

Base pay rate is the wage that has been agreed upon to be the starting point for employee earnings. This can be an hourly rate, a daily rate, a piece rate, or salary per pay. 

4. Deductions

Deductions are amounts taken from the employee’s paycheck that are not for taxes. These can be voluntary amounts that the employee chooses, such as health insurance premiums, retirement plan contributions, and miscellaneous deductions. Salary deductions can also be involuntary, such as a child support order or a tax garnishment. These items can be considered pre-tax or post-tax, depending on the actual deduction.

5. EFTPS

EFTPS stands for the Electronic Federal Tax Payment System. It’s used for an employer to pay federal taxes online.

6. Employee’s Withholding Allowance Certificate (W-4)

Federal Form W-4 or state equivalent is where the employee states the number of withholding allowances claimed to determine income taxes to withhold from the employee’s compensation. Every employee will need to fill out a W-4 upon starting a job.

7. Exempt

Amounts that are not considered part of the taxable compensation. These amounts would be subtracted from the gross pay (total compensation) before the calculations of each applicable tax are completed.

Example:  Employee contributions to a 401(k) plan are considered exempt from federal income tax. The contribution amount for that paycheck is subtracted out before the calculation of the Federal Income Tax (FIT) is done.

8. FICA

The acronym FICA stands for Federal Insurance Contributions Act. It is the formal name for the combination of Social Security and Medicare Taxes. Employers are responsible for remitting FICA and FIT together in a payment known as the federal tax liability. This is reported on the quarterly form 941. 

9. Garnishment

Garnishment is a legal proceeding authorizing an involuntary transfer of an employee’s wages to a creditor to satisfy a debt. Child support is a garnishment that is often placed when couples divorce and one does not pay as agreed in a divorce decree.

10. General Ledger

A general ledger is a tool used to record a business’s financial transactions. It includes amounts for assets, liabilities, revenue, and expenses.

11. Gross pay

Gross pay is the total pay received by the employee before taxes and deductions are removed. This includes the base pay plus any additional earnings like bonuses, vacation pay, and commissions.

12. I-9

The I-9 is a form used to verify if an employee is legally eligible to work in the United States.

13. Income Tax

Income tax is a tax that only employees pay. There are several taxes that fall into this category:  Federal Income tax, state income tax, and local income tax. Federal income tax is paid with FICA as part of federal tax liability. This is calculated by considering taxable compensation on a wage-bracket method but can also be taken as a flat dollar amount or percentage. 

State and local income tax withholding methods vary, as do whether or not that tax is taken in that state.

14. Net pay

Net pay is the employee’s take-home pay. This is the amount the employee receives after taxes and deductions are calculated and subtracted from gross wages.

15. Social Security (OASDI)

Social Security is both an employee withholding tax and an employer payroll tax. The employer is responsible for remitting a total of 12.4% of an employee’s taxable earnings to the IRS. They are permitted to take 6.2% from the employee as a withholding tax and “match” the other 6.2% as a payroll tax. There is a wage base limit, which means that the tax stops at a certain amount of wages for the year. This wage amount varies per year.

16. Take-home pay

Take-home pay is the employee’s wages that remain after all normal deductions and taxes are taken out. This is also known as net pay.

17. Taxable wage base

Taxable wage base is the maximum amount of employee compensation subject to Social Security, FUTA, and state unemployment insurance taxes.

18. Third-party sick pay

Third-party sick pay is compensation paid by a third party (often an insurance company or state insurance program) to an employee because of non-job-related illness, injury, or condition (maternity leave). The payment is considered fully taxable for the first six months, then becomes exempt from FICA and FUTA if the payments continue into the seventh month and beyond. These payments need to be shared with the employer and recorded on the employer’s tax returns, including employee W-2s.

19. Withholding

Subtract amounts from an employee’s wages for taxes, garnishments or levies, and other deductions (like medical insurance or union dues). These amounts are paid over to the government agency or other party to whom they are owed.

Once you familiarize yourself with these key payroll phrases, you will feel like an expert next time you run your payroll.

The post 19 Common Payroll Terms To Know appeared first on PrimePay.

And since we know that voluntary turnover costs a lot (one trillion dollars in 2019!), it’s imperative to create a welcoming and engaging new hire process. 

One way to do is is building or improving your preboarding strategy, which helps ensure new employees are ready to hit the ground running from day one.

What is Preboarding?

The preboarding stage begins when a candidate accepts a job offer and continues until their first day at work. This critical process includes activities designed to familiarize new hires with the company and handle any necessary paperwork, setting the tone for their entire employee journey.

Unlike onboarding, which integrates employees into daily operations and company culture, the preboarding stage is the initial touchpoint and early engagement that reinforces a new hire’s decision to join.

Christina Kroll, Customer Success and Onboarding Specialist, believes preboarding is a smart way to begin onboarding. She explains, “By sending information and materials in advance, you can set new hires up for success and ease their transition into the company.”

Together, the preboarding and onboarding processes create a seamless transition for new employees and lay a solid foundation for their future within the company.

Download our comprehensive Preboarding Checklist to ensure you’re completing all necessary (and nice-to-have) steps.

Benefits of Preboarding for New Hires

Preboarding has many benefits and establishes a positive first impression of your company.

A well-structured preboarding program can:

• Build a strong foundation for their employee journey
• Make new team members feel valued and prepared
• Help candidates feel secure in their decision to join the organization
• Mitigate any uncertainty they might feel before their first day

It can also help with HR metrics you likely track, such as turnover and engagement.

Reducing New Hire Turnover

Preboarding can significantly reduce the likelihood of new hire turnover by fostering emotional connections and maintaining consistent communication. When new hires receive a welcome email or introductory materials, it signals that the company cares about them, which can build loyalty and encourage them to stay. In fact, research shows when early quality programming is in place, there’s an 82% improvement in new hire retention.

Note that a strong company culture is also pivotal in new hire retention. Companies with a positive culture experience significantly lower turnover rates than those with a poor culture—13.9% versus 48.4%, respectively. By integrating preboarding practices that highlight and promote company culture, new hires are likelier to feel a sense of belonging and commitment from the start.

Enhancing Employee Engagement

Communication during preboarding goes beyond automated emails, although that’s important too. HR teams can help people feel prepared for their first day by answering questions and equipping them with the technology they need. This kind of information sharing has clear results: it’s been shown to increase productivity by over 70%.

Engaging new hires before their start date can also boost morale and create a sense of belonging. This early engagement helps new hires feel more connected to the company and their future colleagues, setting a positive tone for their upcoming employee journey.

7 Best Practices of an Effective Preboarding Process

A successful preboarding process involves several key actions that help new hires feel welcomed, informed, and prepared for their roles. Below are seven practices to incorporate into your preboarding process for a stronger and more successful program. 

1. Send Welcome and Introduction Emails 

Personalized welcome emails foster positive connections with new hires before their start date. These emails should include essential information such as a personalized welcome, an outline of the first week, and access to orientation modules. Clear instructions for completing checklist items should also be provided to ensure a smooth transition.

Introduction emails are equally important. They inform coworkers about the new hire’s arrival and help new hires build rapport with their colleagues. A second introduction email can be sent to introduce new hires to their team, facilitating smoother integration.

Tip: In your email to the team, include the new hire’s LinkedIn profile and encourage everyone to connect. This small gesture not only makes new employees feel welcome but also helps them put faces to names and feel more comfortable on the first day.

2. Grant Early Access to Company Resources

New hires appreciate early access to company resources. Consider including employee handbooks, benefits information, and the company calendar in your welcome email cadence. This strategy helps new employees familiarize themselves with the company culture and policies, ensuring a smoother transition once they start.

It’s also best practice to send technology to remote employees the week before their first day so they can sign in and set up their workspace before day one, if they choose.

3. Complete Administrative Tasks

Before technology, most employees’ first days consisted of filling out and signing paper after paper. Luckily, most administrative paperwork can now be completed digitally. 

Preboarding typically covers tax forms, health declarations, and insurance paperwork. Utilizing software – like those for benefits administration and self-service portals – can reduce administrative burdens on HR departments and enhance efficiency by automating routine tasks.

The result? The new hire can focus on on-the-job training on their first day. 

With a few clicks, HR teams can launch the benefits portal for new hires and monitor their completion. 

4. Implement a Buddy System

A buddy program involves pairing a seasoned employee with a new hire. Note that the seasoned employee isn’t the new hire’s supervisor and is ideally on a different team. That part is important, since new employees may feel more comfortable asking questions to someone other than their boss.

Besides creating a welcoming atmosphere for the new employee, buddy systems foster a smooth integration into the organization by: 

• Providing a person for immediate support and answering questions
• Assisting new hires with cultural adjustment
• Creating an environment of confidentiality and encouragement 
• Eliminating uncertainties about procedures

Tip: Before asking for volunteers to be buddies, make sure you have documented your buddy roles, responsibilities, and expectations so everyone is on the same page. 

5. Map Out Training

Before their first day, gather all the necessary resources needed by the new employee to get up to speed. It’s important to curate these materials in a way that is easy to follow, starting with basic company information and gradually moving into more complex tasks and responsibilities. Providing a clear structure will help the new hire navigate their learning journey without feeling overwhelmed.

In addition to compiling these resources, ensure the new hire knows how to access them. Whether the materials are hosted on an internal server, a learning management platform, or shared via a cloud-based system, providing clear instructions on where and how to find these resources is essential. 

Consider setting up an introductory meeting with the training team or the new hire’s manager to walk them through the available materials and answer any initial questions. This proactive approach helps the new hire feel more confident and sets the stage for a smoother onboarding experience, reducing the learning curve and helping them contribute to the team more quickly.

Assign specific courses and tasks for new hires to maintain compliance and prepare them for their role.

6. Schedule Informal Events

Informal social events help establish rapport and significantly improve new hires’ first-day experience. Hosting these events allows new hires to build relationships with their future colleagues, easing their transition into the company culture.

In addition to traditional meet-and-greets, consider incorporating a variety of informal meetings to make new hires feel welcomed and engaged. Virtual coffee breaks, team-building activities, and casual lunch outings can create a relaxed environment that encourages open communication and camaraderie. These informal settings provide an opportunity for new hires to ask questions, learn more about the company culture, and understand team dynamics in a more personal and less formal context.

Consider involving senior leadership in these events to further enhance the experience and demonstrate the company’s commitment to its new employees. When new hires see that leaders are approachable and invested in their success, it can significantly boost their confidence and motivation.

7. Ship a Welcome Package

A welcome package can enhance new hires’ early engagement during the preboarding phase. Branded items like T-shirts, hats, water bottles, pens, mugs, and drink cozies enhance new employees’ sense of belonging.

These branded swag items are excellent additions to a welcome package, making new hires feel valued and more connected to the company.

Tip: Allow employees to opt out of swag items. For example, a new teammate may not want a branded polo; knowing so will save you money and reduce waste.

Digitize Your Preboarding Process

To ensure a positive start for new hires, effective preboarding strategies that create a welcoming and supportive environment from the beginning are essential.

Luckily, HCM software helps streamline the preboarding and onboarding process with automated workflows. Using online solutions reduces errors and saves time. Specifically, a study by CareerBuilder found that automation in this stage of the employee lifecycle saved HR leaders roughly 14 hours of work.

By investing in software and optimizing their preboarding process, companies can reduce new hire turnover, enhance employee engagement, and improve overall retention, ultimately setting the stage for a successful and fulfilling employee journey. 

Run most of your preboarding and onboarding tasks within your HCM for a smoother process – for you and the new employee.

Frequently Asked Questions

What is preboarding?

Preboarding is the period that begins once a new hire accepts a job offer and lasts until their first day, involving activities to acclimate them to the company and complete essential paperwork. It’s crucial for ensuring a smooth transition into the workplace.

How does preboarding differ from onboarding?

Preboarding involves engaging and preparing new hires before their official start date, while onboarding is the process of integrating them into the company once they begin work. This distinction is crucial for fostering a smooth transition into the organization.

Why is preboarding important?

Preboarding is essential as it reduces new hire anxiety and enhances engagement, positively influencing retention and productivity. By creating a welcoming environment, organizations set the stage for a successful employment experience.

What should be included in a preboarding checklist?

A comprehensive preboarding checklist should include essential documentation, account setups, workstation preparation, onboarding programs, training materials, company handbooks, welcome emails, and scheduled meetings or events. This ensures a smooth transition for new hires and helps them feel welcomed and prepared.

How can technology improve the preboarding process?

Technology can significantly enhance preboarding by automating administrative tasks and improving engagement through digital document management and microlearning. This leads to a more efficient and interactive experience for new hires.

Grab Our Preboarding Checklist

A preboarding checklist is essential for efficiently welcoming new hires and outlining necessary steps. A comprehensive one should include everything from setting up email accounts to assigning training materials and scheduling meet-and-greets. The following checklist ensures a smooth and welcoming start for new hires, helping them feel prepared and valued before their first day.

The post Preboarding: Best Practices and Essential Tips for New Hires appeared first on PrimePay.