The government mandates that you provide employees with notice about various things. If you don’t, you can be penalized. Some notices can be handled with workplace posters. Others require personal notice to each employee.
Here’s a brief overview of what to consider.
You already have posters regarding Fair Labor Standards Act (FLSA) minimum wage rules. You may also have to post state minimum wage posters.
Be sure to also have other required posters, including:
- “Employee rights under the Families First Coronavirus Response Act,” which entitles eligible employees of small businesses to certain paid sick and paid family leave.
- “Job safety and health: it’s the law," which complies with OSHA requirements.
- “Equal Employment Opportunity is the law” and a supplement, which states nondiscrimination requirements.
Other workplace poster requirements, including special posters for federal contractors, can be found through the U.S. Department of Labor (DOL).
If you intend to offer a qualified retirement plan to employees in 2021, give notice of their eligibility to participate by the deadline. This may be as early as October 3, 2020 (90 days before the start of the 2021 calendar year plan). The notice should include information about employer contributions (e.g., whether you plan to match employee contributions to a 401(k) plan). Also give employees an option to make salary reduction elections for the coming year for contributions to a 401(k) plan or a SIMPLE IRA if you maintain such plan in 2021.
This notice cannot be done by a workplace poster; it must be provided individually to employees. It can be done by:
- Written correspondence mailed to the employee.
- Electronically via e-mail or made available on a website if the employee consents to receive notices in this manner.
Earlier this year, the DOL issued a rule, effective July 27, 2020, allowing plan sponsors to deliver notices and other disclosures electronically. For example, sponsors can post a summary plan document on a website and give employees instructions on how to access it.
Find more about various notice requirements from the IRS.
Health care plans
If you intend to offer health coverage to employees in 2021, watch for notice deadlines to explain the type of coverage being offered (e.g., a group health plan, an individual coverage health reimbursement arrangement, a qualified small employer health reimbursement arrangement) and the employees’ eligibility for the coverage. This gives them time to decide whether to accept an offer of coverage and/or decide on salary reduction contributions to:
- Flexible spending accounts (FSAs).
- Premium only cafeteria plans.
As in the case of retirement plans, notice may be required as soon as October 3, 2020, for coverage beginning January 1, 2021.
Other employee benefit plans
Depending on the employee benefit plans you intend to offer in the coming year—a cafeteria plan, a dependent care plan, or other plan—again there are notice requirements.
The notice responsibilities on employers are immense. Large corporations have human resources (HR) departments; small businesses don’t. It’s highly advisable to work with experts so you’re sure not to fall short and are penalized. Consider asking for information and advice from payroll companies, accountants, and employment law attorneys.