HCM Insights November 2021

Upcoming Holidays

Thanksgiving

In observance of the Thanksgiving Holiday, CBIZ HCM offices will be closed on Thursday, November 25, 2021, and Friday, November 26, 2021. Also, Thursday, November 25, 2021, is a Federal Reserve Bank Holiday, which means payroll draft dates may need to be adjusted.

Important Payroll Deadlines

Christmas & New Year's Day

CBIZ HCM offices will be closed on Thursday, December 23, and Friday, December 24, 2021. Our offices will remain open through the New Year’s holiday. In order to guarantee the timely posting of employee direct deposits, please be aware that you should process payroll at least two CBIZ business days (by 2:00 p.m.) prior to your check date to allow the appropriate time for delivery of your checks and reports.  

Important Payroll Deadlines

For a payroll check date of December 23 - 24, it is important to process payroll on or before Tuesday, December 21, as the last bank file for the holiday week will be sent on December 23.

As always, your CBIZ HCM team is here to help should you have questions. We appreciate your continued partnership, and we wish you and your business the best of health. Please contact your payroll services team if you have any questions.

 Holiday & Year-End Shipping Reminder

The holiday season is here, which means it’s the busiest time of year for our payroll couriers! Between the holidays, current shipping delays, and the possibility of inclement weather this time of year, we encourage you to process payroll one or two days earlier than usual to ensure there is no delay in shipment. Please note that there will be no impact on bank drafts in the event payrolls are processed early. 

2021 Payroll & HR Year-End Checklist

In the craze of year-end, it can be easy to overlook Human Resources (HR) processes. We will have more details coming your way soon. But to help you get started, we put together a year-end checklist for you to consider.

• Verify employer data used in processing your quarterly tax reports. For example, make sure that the company address is correct.
• Review employee information for accuracy. Double-check items such as the employee address, state and local tax setup, as well as their social security number.
• Determine the appropriate amounts that will be reported and tax to be withheld for employee taxable fringe benefits and submit before the last processing of the year.
• Audit third-party sick payments made to your employees in the past year and record the information in the payroll system before the end of the year.
• Look over the processing calendar for next year to make sure it is accurate.
• Schedule any bonus payments for the remainder of the current year.
• Request any special reports that will be needed for year-end.
• Remind employees to complete a new W-4, if applicable.
• Confirm that all manual checks written during the year and any voided paychecks are recorded in the system.
• Once you receive the employer’s state unemployment tax rate for the upcoming year, send the information to CBIZ. (Email:[email protected] | Fax: 540-343-5279 | Mailing Address: 2797 Frontage Road NW, Suite 2000, Roanoke, VA 24017)

NACHA Operating Rules & Guidelines

The National Automated Clearing House Association (NACHA) manages the development, administration, and governance of the ACH Network in the United States. The following information is provided to update CBIZ clients about several recent and upcoming changes made by NACHA to its Operating Rules and Guidelines.   The rules changes noted below are those considered to have a potential impact on CBIZ clients based on the nature of the transactions CBIZ initiates today on their behalf.  Rules changes that were outside the scope of the services CBIZ provides to clients have not been included in the summary below.

Implemented Revisions to the NACHA Operating Rules & Guidelines

Same-Day ACH Cutoff Times - effective March 19, 2021 -  The cutoff for submitting Same Day ACH files for processing was extended to 4:45 pm EST. This allowed for broader processing of urgent transactions without requiring wire transfers, which often come with higher fees. While the financial institutions with which CBIZ has relationships must receive the files earlier than this new cutoff time, we were excited to be able to expand our internal Same Day processing windows with this enhancement in 2021.

Upcoming Revisions to the NACHA Operating Rules & Guidelines

Same-Day ACH Limits – expected to be effective March 18, 2022 – The limit for Same Day ACH transactions is expected to increase from $100,000 to $1,000,000. CBIZ HCM will evaluate opportunities to extend our internal processing limits and requirements in order to enhance our client experience.

Supplementing Data Security Requirements – phase 2 expected to be effective June 30, 2022 – NACHA has issued rules to supplement the previous ACH Security Framework data protection requirements to explicitly require large organizations to render deposit account information unreadable when stored at-rest electronically. CBIZ is actively reviewing all requirements to ensure compliance.

2022 Retirement Limits & Social Security Adjustments

The Internal Revenue Service recently announced information on defined benefit and defined contribution plan limits for 2022. Additionally, the Social Security Administration recently announced a Social Security wage base adjustment for 2022.

On November 4, the IRS released the 2022 cost of living adjustments (IRS Notice 2021-61) applicable to defined benefit and defined contribution plans (highlights below). 

2022 Social Security Cost-of-Living Adjustment 

The Social Security wage base in 2022 will increase to $147,000 from the 2021 wage level of $142,800. The combined Social Security and Medicare tax rate remains at 7.65% and the Social Security portion is 6.2% on wages up to the applicable maximum taxable amount; the Medicare portion is 1.45% on all wages.

The Affordable Care Act imposes an additional 0.9% Medicare tax on high wage earners, applicable on earnings in excess of $200,000 in a calendar year.

Minimum Wage Updates

Minimum wage changes have already taken place in Connecticut and Florida and on December 31, 2021, minimum wage changes will take place in New York.  With the new year, minimum wage changes are set to take place in  Arizona,  California, Colorado, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, New Jersey, New Mexico, Ohio, Rhode Island, South Dakota, Vermont, Virginia, and Washington.   

Minimum Wage Change Effective August 1, 2021

Connecticut

• Hourly minimum wage $13.00 (up from $12.00)
• Tipped worker hourly minimum for wait staff $6.38 and $8.23 for bartenders

Minimum Wage Change Effective September 30, 2021

Florida

• Hourly minimum wage $10.00 (up from $8.65)
• Tipped worker hourly minimum: $6.98 based on a tip credit of $3.02

Minimum Wage Change Effective December 31, 2021

New York

• Hourly minimum wage New York City Employers and New York City fast-food workers: $15.00 (unchanged)
• Hourly minimum wage Nassau, Suffolk, and Westchester counties: $15.00 (up from $14.00)
• Hourly minimum wage for fast-food workers in the remainder of the state: $13.20 (up from $12.50)

Minimum Wage Changes Effective January 1, 2022

Arizona

• Hourly minimum wage: $12.80 (up from $12.15)
• Tipped Employee hourly minimum: $9.80 (up from $9.15) based on a tip credit of $3.00

California

• Employers with at least 26 employees hourly minimum wage: $15.00 (up from $14.00)
• Employers with fewer than 26 employees hourly minimum age: $14.00 (up from $13.00)

 Colorado

• Hourly minimum wage: $12.56 (up from $12.32)
• Tipped Employee hourly minimum: $9.54 (up from $9.30) based on a tip credit of $3.02. 

Delaware

• Hourly minimum wage: $10.50 (up from $9.25)
• Tipped Employee hourly minimum: $2.23

Illinois

• Hourly minimum wage: $12.00 (up from $11.00) 
• Tipped Employee hourly minimum: $7.20 (up from $6.60) 

Maine

• Hourly minimum wage: $12.75 (up from $12.15) 
• Tipped Employee hourly minimum: $6.38 (up from $6.08) based on a tip credit of $6.38 (up from $6.08).

Maryland

• Employers with at least 15 employees hourly minimum wage: $12.50 (up from $11.75)
• Employers with no more than 14 employees hourly minimum wage: $12.20 (up from $11.60)
• Tipped Employee hourly minimum $3.63 (no change)

Massachusetts

• Hourly minimum wage: $14.25 (up from $13.50) 
• Tipped Employee hourly minimum: $6.15 (up from $5.55) based on a tip credit of $7.95.

Michigan

• Hourly minimum wage: $10.10 (up from $9.65) except suspended if for 2021 the unemployment rate is at least 8.5%.
• Tipped Employee hourly minimum: $3.83 (up from $3.67) based on a tip credit of $6.27 (up from $5.98) except suspended if for 2021 the unemployment rate is at least 8.5%.

Minnesota

• Large employers hourly minimum wage Indexed for Inflation: $10.33 (up from $10.08)
• Small employers hourly minimum wage Indexed for Inflation: $8.42 (up from $8.21)

Missouri

• Hourly minimum wage: $11.15 (up from $10.30)
• Tipped Employee hourly minimum: $5.575 (up from $5.15) Note: Employers of tipped employees must pay tipped employees at least 50% of the minimum wage, plus any amount necessary to bring the employee's total compensation to a minimum of $11.15

Montana

• Hourly minimum wage Indexed for Inflation: $9.20 (up from $8.75)

New Jersey

• General hourly minimum wage: $13.00 (up from $12.00)
• Seasonal employers and small employers with no more than five employees hourly minimum wage: $11.90 (up from $11.10)
• Agricultural employers hourly minimum wage: $10.90 (up from 10.30)
• General Tipped Employee hourly minimum: $5.13 based on a tip credit of $7.87 

New Mexico

• Hourly minimum wage: $11.50 (up from $10.50)
• Tipped Employee hourly minimum: $2.80 (up from $2.55) 

Ohio

• Hourly minimum wage: $9.30  (up from $8.80) Note: Applies to businesses with annual gross receipts of at least $342,000
• Tipped Employee hourly minimum: $4.65 (up from $4.40)  Note: Applies to businesses with annual gross receipts of at least $342,000

Rhode Island

• Hourly minimum wage $12.25 (up from $11.50)
• Tipped Employee hourly minimum: $3.89 (no change) 

South Dakota

• Hourly minimum wage: $9.95 (up from $9.45)
• Tipped Employee hourly minimum: $4.975 (up from $4.725) 

Vermont

• Hourly minimum wage: $12.55 (up from $11.75)
• Tipped Employee hourly minimum: $6.28 (up from $5.88) 

Virginia

• Hourly minimum wage: $11.00 (up from $9.50)
• Tipped Employee hourly minimum: $2.13 (no change) 

Washington

• Hourly minimum wage: $14.49 (up from $13.69)

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The information contained in this HCM Insights is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations. This information is provided as general guidance and may be affected by changes in law or regulation. This information is not intended to replace or substitute for accounting or other professional advice. You must consult your own attorney or tax advisor for assistance in specific situations. This information is provided as-is, with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.