Year-End Checklist for Employers

Another year is coming to a close, which means there’s a long list of items that need to be squared away before 2026 rolls in. To help ensure you start the new year strong, we’ve compiled a list of the key HR to-dos that you don’t want to miss.

Train managers on new labor law updates

It’s important to be aware of HR changes at the federal and state level and take proactive steps to prepare your company and remain in compliance.

State: Minimum Wage and Tip Credit

Hawaiʻi’s minimum wage will increase to $16.00 per hour beginning January 1, 2026. Employees who earn tips may be paid up to $1.25 less per hour if wages plus tips equal $23.00 or more per hour.

The final scheduled minimum wage increase will take effect on January 1, 2028, raising the rate to $18.00 per hour.

Federal: One Big Beautiful Bill Act (OBBBA)

Two new federal income tax deductions impact payroll and reporting of overtime and tips, for tax years 2025-2028:

• Qualified Overtime Deductions: Employees may be able to deduct up to $12,500 (or $25,000 for married filing jointly) of eligible overtime pay, as defined by the Fair Labor Standards Act. This applies only to the premium portion required by federal law, not other forms of premium pay.
• Qualified Tips Deductions: Employees in occupations that customarily receive tips may be able to deduct up to $25,000 in qualifying tips from federal income tax. Tips must be voluntarily received and properly reported.

Prepare Form W-2 for employees

A big task for the top of the year is issuing a Form W-2 for every employee who received a paycheck in 2025 and ensuring this happens by January 31, 2026. This will require employers to have year-to-date totals for each employee including wages and withholding, along with deductions for medical plans, health savings accounts, and other items. Refer to the IRS website for a full list of rules and regulations.

To ensure all Form W-2s are received by employees on time, we also recommend requesting employees to verify their mailing address before the end of the year.

Recap performance evaluations

Ideally, managers should check in with their employees at least once every quarter to review goals, monitor progress, and offer feedback.

An end-of-the-year performance evaluation could be a summary of your check-ins throughout the year. Use this as a time to discuss what else the company can do to help employees be successful in the coming year and allow them to share feedback about how they’re doing. These ongoing discussions should give employers a good idea of the levels of employee engagement.

If your team is not currently meeting throughout the year, the New Year is a great time to start.

Read also: 5 Steps to Hassle-Free Performance Evaluations

Update your employee handbook

Did you add a new policy or change your benefits recently? Have there been state or federal employment law changes within the last year that impact your workforce? If so, your handbook needs an update.

Ideally, employers should review their handbooks annually to ensure employees have the most up to date information. A natural fit to do this review would be at the end of each year so you’re compliant for the new year.

Make 2026 your most efficient year yet

If you’re struggling to manage all the HR aspects of running a business–compliance, payroll, training, benefits, risk management, employment law—you’re not alone.

That’s why partnering with a Professional Employer Organization (PEO) like simplicityHR by ALTRES could be your best move in 2026. Our clients depend on us to be their trusted partner for HR compliance and administration, saving them time, stress, and giving them back the freedom to give back to their business.