Webinar Recap | 2024 End-of-Year Review

On Friday, December 13, Adams Keegan’s advisory team, including Charles Rodriguez, Brandon Roland, Cindy Mastrofrancesco, and Justin Brown, held an informative session on year-end best practices for payroll processing in the final webinar of 2024. They also reviewed key updates taking effect on January 1, 2025, including changes to minimum wages, state leave requirements, and other critical compliance issues. 

Didn’t catch the webinar on December 13? Click here to view it.

Year-end payroll alerts and best practices

As the holiday season wraps up, employers should plan payroll submissions around holiday schedules. With Christmas and New Year’s Day falling midweek, businesses need to ensure timely payroll processing to avoid delays. Adjustments for FedEx shipping deadlines and bonus payroll runs are also key. Employers offering bonuses must distinguish between discretionary and non-discretionary bonuses to avoid unexpected overtime recalculations. 

Additionally, employers should address unclaimed wages – paychecks issued but not cashed – to ensure compliance with state laws. Payroll corrections for employees working across multiple states is a year-round issue that requires consistent monitoring.

Employee address and work state practices

Maintaining accurate employee classifications and address records is important for compliance. With remote work becoming more common, employees relocating or working temporarily in other states can create compliance risks for employers. For instance, tax withholding laws and employment regulations vary by state and must be adhered to based on the employee’s work location. 

Payroll adjustments stemming from misreported work locations could incur significant costs. To minimize errors, businesses should circulate reminders to remote employees to confirm their current addresses and work locations. Employers are encouraged to regularly verify employee addresses and update records to prevent costly payroll corrections and compliance issues.

2025 payroll updates

As employers prepare for the year ahead, understanding the critical payroll updates set to take effect in 2025 will be essential for maintaining compliance and streamlining payroll processes.

• Tax Cuts & Jobs Act (TCJA): The relocation expense deduction remains suspended under the TCJA, with potential changes expected under the new upcoming administration. The bicycle commuter benefit, another suspended provision, may also see updates in 2025.

• FUTA credit reductions: Employers in California and New York should anticipate higher FUTA tax rates due to unpaid federal loans. Adams Keegan’s payroll system proactively calculates these liabilities, but businesses in these states should budget for the increased rates.

• Social Security wage base: The Social Security wage base will increase to $176,100 in 2025, up from $168,600. Employers should prepare for these adjustments as payroll taxes reset at the start of the year.

The team briefly addressed state-specific changes to paid sick leave and family medical leave policies. Employers operating in multiple states must stay informed about these regulations to ensure compliance. Additionally, lessons learned from the Pregnant Workers Fairness Act, implemented earlier in 2024, underscore the need for proactive updates to workplace policies.

As 2025 approaches, employers should view these updates as opportunities to refine their payroll processes and ensure compliance. By staying informed and proactive, businesses can navigate legislative changes while maintaining a productive and engaged workforce.

View the full webinar here and allocate about 40 minutes to take a deep dive into the conversation.