On December 5, the IRS issued the redesigned 2020 Form W-4 (Employee’s Withholding Certificate). The form is long-awaited in the payroll community, as the redesign has been postponed for years due to various concerns and time constraints. However, change can be confusing and the update has been dreaded by many employers and employees alike.
It used to be that new hires filled out their filing status and the number of allowances on the W-4. Using the W-4 personal allowances worksheet, employees calculated a number that told their employers how much money to withhold from their paychecks for federal, state and local taxes.
What’s changed and why
Now things are a bit different. The Tax Cuts and Jobs Act (TCJA) eliminated personal exemptions, which allowed for deductions against a taxpayer’s personal income. These exemptions were tied to allowances, but since exemptions are now gone, the need to determine the number of allowances is gone as well.
Enter the new Form W-4! The form is designed to make tax withholdings more accurate. Those who fill out the 2020 form are less likely to end up with a large tax bill or a big refund when they file tax returns in 2021. This way, wages can be more accurately invested or spent on essential expenses throughout the year. Interestingly, this may actually be the biggest concern for many employees who have used their tax filing as a savings account of sorts in the past.
Not all workers must complete the 2020 Form W-4, as the IRS has designed the withholding tables to work with prior year forms as well. However, all new employees starting in 2020 or employees updating their withholdings in 2020 must use the new Form W-4. The IRS also recommends that employees revisit their W-4 forms annually to account for any life changes, such as getting married or having kids.
A step-by-step guide
So, how should your people actually fill out the form? We’re glad you asked! Listed below are the 5 simple steps for filling out the new W-4:
1.Enter Personal Information
First name, last name, social security number and filing status (single, married, head of household, etc.) are all lumped in this box. This step must be completed by all employees, so if an employee does not fill out the form at all, you are required to calculate their withholding as “Single.” This withholds their taxes at the “Single” rate, resulting in more income tax being withheld.
2. Multiple Jobs or Spouse Works
Employees should complete this step if they currently work more than one job, or if they are married filing jointly and their spouse is working as well. For this step, following option A will give employees the most accuracy (and privacy) of the three, since the new online withholding estimator will use all the relevant entries for the form. Option B provides accuracy as well, but requires manual work so there is more room for error. Option C is the easiest to complete but is the least accurate, as it assumes that both jobs have similar pay.
3. Claim Dependents
Here employees will multiply their number of dependents by specific dollar amounts. When the TCJA was enacted, the law changed so that more people would qualify for the child tax credit. Single taxpayers with an income of $200,000 or less ($400,000 if married filing jointly) are now eligible. If your employees have questions about this section, feel free to direct them to the definitions in IRS Publication 972 – Child Tax Credit if they’re looking to claim the credit.
4. Other Adjustments
This section is optional, but offers a few other things employees may want to consider when calculating their tax withholding. Other income (not from jobs) could include retirement income, dividends, or any additional income that might not be subject to direct withholding. Deductions include things like mortgage interest or charitable contributions. Extra withholding is simply any extra amount of income that the employee would like to withhold per paycheck.
5. Sign and Date
Last of all, your employee must sign the W-4 in order for the form to be valid.
And that’s it! The new W-4 definitely comes with a learning curve, but your confidence with the form will instill confidence in your employees that their taxes will be withheld accurately. More details on each of the steps above (including information on who can claim exemption from withholding) can be found on page 2 of the form.
If you’d like, you can also direct hesitant employees to the IRS Tax Withholding Estimator. Employees can use their most recent pay statements and income tax return to fill in the questions online. This will then calculate an estimate from the IRS of what their tax liability will be, and whether their current withholding is too much or not enough to meet the liability. Questions, concerns or needing help with onboarding in general? We’re here to help! At Servant HR, we strategically partner with you to manage and optimize all your human resource responsibilities. From employee onboarding to legal counsel, we help lighten your administrative load so you can focus on what matters most. Give us a call today and see how Servant HR can serve your business in 2020!
In an effort to meet employee demand and attract top talent, workplace benefits have continued to broaden. Flex schedules, ping-pong, pets in the office—you name it, someone’s probably trying it.
But for many new parents in America, childcare benefits are the highest priority and still the most difficult to find. Stockpiled PTO and sick days go by quickly, and even those with paid parental leave still may feel they must put a child into childcare sooner than they would like.
Being away from a baby for hours at a time, as well as managing the burden of day care costs, has a significant impact on families. According to 2018 research by the Maryland Family Network, the median family income in Baltimore County is $86,700 and day care for two children in Baltimore County costs an estimated $20,200 per year. That’s nearly 25% of income spent on childcare. Other studies showed that in many states, childcare costs more than a college education.
Many families opt for one parent to stay home until the child is older, but this is often as much a financial sacrifice as day care—if not more. This causes problems for employers too. Finding people to fill positions while parents are out of the workplace can be an HR headache, backlog projects, and slow overall efficiency.
PIWI is an organization dedicated to convincing companies to let employees bring babies to work. The institute has proven that letting new parents sport a baby carrier at the office has a positive impact on efficiency, teamwork and office morale, improves recruitment efforts and helps moms and dads get back to their desks quicker.
Beth Shelton is the CEO of the Girl Scouts of Greater Iowa and a mom herself. For Beth, implementing an Infant-at-Work program was less about helping employees save on day care costs, and more about showing employees they are valued.
“With the Infant-at-Work program, we’re supporting parents in their transition back to work, and creating a space where having children and advancing your career can happen simultaneously,” she explained.
“The policy results in parents being very responsive to meeting their babies’ needs at the first sounds of distress,” Moquin noted. “Babies are much happier, calmer and quieter than expected, and then coworkers and managers find themselves bonding with the baby.”
Moquin has seen workplace morale actually improve, as colleagues contribute to “the village” mentality. Employees generally consider the new baby a part of their community and are willing to help out, as new parents are essentially now working two full-time jobs.
If you’re thinking of offering an Infant-at-Work program at your company, the following bullet points provide specific recommendations by employers:
Pilot the program first for three to four weeks. This gives employees a chance to experience the dynamic before it’s set in stone. In many cases, the program is successful and becomes permanent.
Set an age for eligibility. PIWI recommends accepting children up to 6 months, but some companies allow children until they are crawling. Others do not have a cutoff.
Clearly communicate when the child will be in the office, so everyone is aware of the schedule.
Identify a few backup employees to provide support if needed.
Understand it’s an adjustment. It can take a while and the first week is usually the hardest.
Something to Consider
The program doesn’t work for every organization and it doesn’t work for every family. Business owners will have to think about all of the ramifications if they wish to consider. Some jobs require too much accomodation, some parents are unable to manage the balance of attention and not all babies enjoy the social stimulation of office-life.
Still, like many other unique benefits, it’s something to contemplate as a tough talent market has employers pulling all strings. For many employees, just having the option can communicate a company’s thoughtful care and investment.
When it comes to legal situations around social media and the workplace, the best defense is a good offense. You may not be asking these exact questions today, but someday you might. Keep reading to learn how to avoid legal traps as an employer, and how to formulate a stronger social media policy as an HR professional.
Q: “My employee is making comments about me on his/her personal Facebook account. What can I do?”
A: Perhaps nothing has emboldened people more than the rise of social media. Comments one wouldn’t dare make in person can now be expressed quickly and frequently behind the perceived safety of the internet.
But as inappropriate or insulting as a post may be, employers do not always have the right to take action against an employee for social media behavior. The National Labor Relations Act enforces the right of employees to engage in “protected concerted activity.” This law allows employees, with or without a union, to act together to improve their pay and working conditions.
Q: “What exactly qualifies as protected concerted activity?”
A: According to the National Labor Relations Board, an employee simply griping about their job is not concerted activity. Whatever an employee says or posts on social media must have “some relation to group action, or seek to initiate, induce or prepare for group action or bring a group complaint to the attention of management.”
However, the NLRB decides what actions deserve protection, and because every situation is different, the law is intentionally vague. Sometimes comments made on social media are interpreted as protected concerted activity because they are supported by other coworkers or simply directed at management.
In one case, an employee of a New York catering company was fired for profane Facebook comments directed at his boss and his boss’s family. Still, the NLRB found this employee protected, since the comments were made during a work break, expressed the employee’s concern about management and ended with an all caps call to join the union. The NLRB ordered reinstatement and back pay for the employee.
Less extreme examples of concerted activity include talking with coworkers about wages and benefits, circulating a petition for better hours, participating in refusal to work in unsafe conditions or joining with coworkers to address issues directly with an employer, government agency or media outlet.
The law does not protect spreading maliciously false information, or bashing an employer’s products or services without linking back to a labor controversy. However, the still-vague terms have caught many employers in legal traps.
Q: “So employers can never terminate employees for online behavior?”
A: Not exactly. Off duty conduct laws vary state to state, but employers do have the right to regulate online activity. For example, an employer can discipline employees for online behavior during work hours. However, they must be consistent in enforcing this policy. Discipline must be enforced for all online activity during work hours, not just when negative comments about the company are made.
Employers should intervene when an employee acts disloyally online as well. Complaining about a manager or pay rate on Twitter isn’t considered disloyal, but if an employee claims online that the hospital where they work is unsafe, this is considered disloyal. However, if employees address legitimate safety concerns with an employer or government agency, this activity is protected.
Q: “What other ways can I prevent legal situations around social media in the workplace?”
A: Employers must welcome feedback. Many attacks on social media happen out of pent up frustration. If frustration can be expressed early on when everyone is still rational, the extreme cases can be avoided.
Consistent communication about social media policy is also essential. Along with routine education and training, it is important for company handbooks to have compliant social media policy in order for interceding action to take place fairly and consistently. Any employer action in response to employee behavior on social media must be in line with previous action and easily traceable to a clear handbook policy.
For some employers, “onboarding” is defined as that first paperwork meeting with a new hire — shaking hands, filling out tax forms and practicing signatures. For others, onboardingis simply any learning that takes place from day one on the job. Either way, both interpretations of onboarding are necessary parts of the hiring process, as employees work to acclimate to a new employer.
Even after you’ve sealed the deal, there is still a small gap of critical time between job acceptance and an employee’s first day. Usually a few weeks are given for employees to transition out of their current job and take a breath before their new one begins. But a lot can happen during that gap. Job offers are often used to bargain in other interviews or leverage a promotion with a current employer.
Some employers combat this risk by starting the onboarding process earlier. “If we can get them in the door faster and have them start completing insurance forms, they’ll be less likely to quit!” But research shows retention comes less from eager paperwork meetings and more from relationship and exceptional hospitality.
Guarding the Gap
Creative initiatives to welcome and engage new hires, from the time of offer acceptance to day one, are called preboarding. While ultimately beneficial for employers and a company’s bottom line, preboarding is most effective when genuinely focused on the employee.
Whether it’s that first meeting or the first few weeks of work, employees begin learning everything about their new employer during onboarding.
Preboarding offers an extra-mile opportunity for the employer to learn about the employee.
Taking time and honest interest in a new hire demonstrates the value a company places on its people. This helps new hires make the jump to a new workplace and feel at home faster (while inadvertently encouraging their best work).
Attention to hospitality details may seem like a waste of time, but ignoring preboarding can prove costly. Consistent communication with new hires before their first day prevents ambivalence and makes employees less likely to continue communication with other potential employers. Lack of engagement before starting work allows new hires to feel that nothing is yet final and continue pursuing other offers.
Employers may use up some time on the front end, but preboarding also saves time on day one. Since a new employee has already become familiar with the team, culture and business operations in the weeks after acceptance, day one can be a work day rather than a day of introductions and tours.
So how is it done? Is it really just muffin baskets and welcome emails? Sometimes!
Different ideas work better for different companies, but these small things can help new hires feel welcomed, valued and excited to stick around:
Before an employee’s first day, schedule a tour followed by a lunch with immediate team members or their managers. This helps the employee to feel more confident on their first day instead of walking in blind.
Send the employee a questionnaire after acceptance to outline things they like and dislike. When figuring out where to go/what to cater during a welcome lunch, the employee’s favorite place can be chosen without putting them on the spot. This questionnaire can be used throughout an employee’s time, as a way to intentionally thank them for good work. (Employers can also post employee questionnaires for everyone to see, fostering intentional relationships between coworkers.)
Pay attention in interviews and follow up with specifics. If a new hire mentions their family in the interview, send a gift basket including treats for their kids. If they just moved to the area, gift them with favorite local goods and a list of restaurant recommendations from their coworkers.
Keep checking in. Consistent emailing shows an employer is available. Sending a schedule of the first week, creating their email account and telling them when their desk is set up lets a new hire know you’re anticipating their arrival and keeps them in the loop.
Some companies offer “show up bonuses” on an employee’s first day or at the end of their first month. Of course this isn’t feasible for every company, but this bold gesture is an unexpected way to show appreciation.
Follow through. Hospitality attempts can seem insincere if new employees are left to fend for themselves after day one. In the initial learning stage at a new job, consistent check-ins are necessary to ensure confident acclimation specific to each new hire. This care and attention will not go unnoticed and can help ensure best fit for both employees and employer.
You may not be able to give your employees a million bucks, but you can make them feel like it! These small gestures help to guard that gap of critical time, and keep your employees excited about their new position with you.
Want to spend less time with the HR hassle and more time with your people? We want that for you too. Contact us today and see how Servant HR can give you the freedom to focus on what’s most important.
Halloween is just around the corner, and yet… few things spook employees more than those looming, end-of-year reviews.
A recent survey of 1,000 full-time employees found that one in four have called in sick because they were anxious to face an appraisal. Almost 75% felt “in the dark” about how their managers viewed their performance leading up to review, and 62% felt blindsided afterward. In the aftermath, 15% have cursed, 15% have cried and 28% have started looking for other jobs.
If employees are ghosting, impending performance reviews should spook employers as well. But the review process doesn’t have to be so scary! Here are three tips for making performance reviews more of a treat than a trick:
1. Start Early
Feedback should be established as routine upon hire. Performance reviews don’t have to be once a year, doomsday meetings—they can be monthly or weekly touchpoints that start as early as an employee’s first day. Early reviews are a chance to develop trust and relationship between manager and employee and to get employees comfortable with talking about their performance.
Consistent communication and feedback from the start helps employees understand the purpose of appraisals and develop confidence in the review process.
The first tip makes this second tip a lot easier. If relationship is not established, it’s common for managers in performance reviews to talk… a lot. However, a performance review is most effective as a discussion, not a lecture. Lectures can make employees feel like they’re just being yelled at, but intentional, back-and-forth conversation allows employees to experience trust and respect from their manager. Managers encourage this kind of conversation simply by asking questions. Good performance reviews offer space for employees to consider their goals, preferences, set-backs, achievements and failures. Rather than listing off highs and lows, employees are best motivated by analyzing individual potential and growth. A review should prioritize gaining insight into the performance of both employee and employer, which means feedback about management should be prompted as well.
3. Be Positive
Healthy organizations don’t sweep issues under rugs. Problems are dealt with right away and any necessary critique or discipline happens in real time—not months later at a performance review. Honest confrontation and consistent communication should be practiced daily in order to ensure positive performance reviews. Spending the majority of time on the positive aspects of an employee’s performance is almost always more effective than spending the majority of time on the negative. Don’t neglect areas that need improvement, but no employee’s performance is completely negative—make sure that is not being reflected in the review. Acknowledge failures by asking questions, exploring options and landing conversations on upbeats. People are best motivated when specific actions are recognized and appreciated. Providing direct encouragement and ways for improvement keeps performance reviews constructive and cultivates healthy work relationships.
Trust and relationship is at the core of effective reviewing. If done early and often, performance reviews don’t have to be daunting, vague meetings that hang over the holidays. Asking good questions and seeking the best for employees develops respect—enabling managers to humbly accept feedback and constructively analyze ways for employee improvement.
Every year, Servant HR client Edge Mentoring, brings renowned speakers to the heart of Indianapolis for the half-day EDGE|X leadership conference. The conference audience is people leading in all arenas—workplace, community and home—and this year’s EDGE|X conference theme is “People Centered Leadership.”
This theme hits close to home for us in HR, as a good human resources team focuses first on humans! Naturally then, a healthy HR team plays a strong role in organizational leadership development.
While often viewed as a heads-down operation, HR should perhaps be the most people-centered in its vision and approach toward company development. Meeting this expectation requires HR professionals to step up to leadership themselves—consistently offering strategic opportunities for internal growth.
As advocates for employees, it is necessary for HR to prioritize investment in their company’s people. Investment looks like a variety of things, from relationship building to internal promotions, but perhaps the most popular way HR promotes leadership development is corporate training.
Less Training, More Practice
The 70:20:10 principle claims 70% of learning happens from on-the-job experience, 20% from bosses and mentors and 10% from formal training. However, “traditional HR” tends to focus majority of energy on the 10% formal training—seminars dedicated to bagels, leadership styles and self-reflection.
Despite being imbalanced, research also shows too much introspection actually amplifies our blind spots—the exact opposite of the intended effect. Richard Pascale, acclaimed Fortune 500 adviser and faculty member at the Stanford Graduate School of Business, says in his book Delivering Results, “Adults are more likely to act their way into a new way of thinking, than to think their way into a new way of acting.”
Insight vs. Outsight
A more strategic opportunity for leadership development is offering experience. The term “outsight,” coined by UK organizational behavior professor Herminia Ibarra, is defined as “the fresh, external perspective that comes from doing new and different things and interacting with new and different people.”
Directly opposite of formal training guiding you to personality insights, outsight involves trusting the 70:20:10, evaluating job experiences first and trying out employees in different spaces. Spending time with this 70% demonstrates HR as people-centered leaders.
This approach is certainly more difficult. The relational work combined with the risk of assigning jobs different from what employees have done in the past, makes a self-reflection seminar sound pretty good.
However, research shows strategic views of work are developed best through “experience in an internal project outside of usual responsibilities.”
To put it simply, people become better leaders by practicing leadership.
For HR, the job here is understanding the work employees have done forever, and then designing cross functional projects that challenge their comfort levels and offer exposure to senior leadership. Essentially, giving people places to practice.
The Role of HR
Whether outsourcing with a PEO, or housing an internal department, the separation from a company puts human resources in a powerful and unique position. As a kind of third party, HR is able to maintain an objective position when evaluating the needs of an organization.
HR also has access to cross-cutting relationships through its work with every level in a company. Encouraging diverse and externally focused networks for both the work table and the executive table, keeps ideas fresh and lets employees know they are valued by their employer.
This doesn’t mean including random employees in all high-level meetings. But, it does mean assigning side projects and activities to help cultivate new relationships and skills. (After all of that, then we can do the self-reflecting!)
The responsibility of HR is to care for a company as a whole. HR professionals steward their function well by cultivating the best possible relationships and opportunities for both employer and employee. This requires an entirely people-centered approach to leadership, and this approach in return, creates people-centered leaders.
But don’t just take it from us! To learn more about people-centered leadership and how you can cultivate these leaders in your organization, register for the Edge|X conference on Friday, October 5th. We’ll see you there!