HR Compliance's Magic Number: 50 Employees
If one is the loneliest number, 50 is the most intimidating for HR teams at small businesses. Once your headcount passes this threshold, you effectively trigger an avalanche of new reporting and compliance requirements.
When startups make it “over the hill,” fledgling HR teams come of age. Here are some of the key things to be aware of.
The Affordable Care Act
The Affordable Care Act (ACA) requires employers with more than 50 full-time employees to offer healthcare benefits. Keep in mind that the law has a slightly different interpretation of full-time than what you may be used to. Under the law, anyone who works at least 30 hours a week, or 130 hours a month, is considered full-time.
If you’re in an industry like hospitality or retail where headcount can fluctuate during the year, the rules are fairly accommodating here. Seasonal staff working less than 120 days year do not count toward your headcount for ACA compliance purposes.
Once you hit the 50 full-time employee mark, your company becomes what’s called an applicable large employer (ALE). In addition to offering health insurance, you’ll need to demonstrate your compliance to the IRS annually by filing 1095-C and 1094-C forms. Your broker or benefits administration vendor should be able to help you generate these forms.
The Equal Employment Opportunity Commission (EEOC) was established in 1965 to protect job applicants and employees from discrimination on the basis of their race, religion, sex, and other protected traits. The organization requires that businesses over a certain size annually submit a headcount report including race, gender, and role information.
While private businesses don’t have to worry about demographic reporting until after crossing 100 employees, federal contractors need to comply once they hit the 50 mark. Note that the law does not distinguish between full-time or part-time workers. The annual deadline to file the form is March 31.
Family and Medical Leave
The Family Medical Leave Act (FMLA) requires companies with 50 or more employees to offer their employees up to 12 weeks of unpaid, job-protected leave. There’s one exception here—if your place of business is a public or private school, you’ll need to offer the benefit regardless of headcount.
FMLA leave can be used for certain medical and personal reasons, including but not limited to:
The birth or adoption of a child
A serious illness or injury
Needing to care for a spouse, parent, or child with a health condition
Needing to address a personal matter due to a spouse, son, daughter, or parent being called into military service
You’ll also need to hang a workplace poster outlining the benefits and eligibility requirements. Note that several states and cities have their own, more robust laws requiring paid leave. Be sure to double-check what your jurisdiction requires.
State and Local Laws
Never assume that you’ll only need to worry about federal rules. State and local governments often impose their own labor laws, many of which are tied to headcount. A growing number of states and cities even have separate minimum wages in place depending on company size.
Need a few examples? In California, once you hit the 50 employee mark you’ll need to put managers through two hours of anti-harassment training every two years. In New York, you’ll need to provide employees with 90 days’ notice for any mass layoffs or relocations. State and local provisions applied to companies with 50 or more employees are diverse and span all disciplines of HR.
As companies approach and then soar past the 50 employee mark, their HR teams often stay small. In order to keep up with compliance requirements, recruiting demands, and more, these teams need an edge to keep their heads above water.
“Work smart, not hard.” You’ve heard the cliché before. But for small HR teams, it’s a mantra that helps them stay afloat. In our eBook, 17 Hacks For Small HR Teams, we’ve put together a list of the strategies that make these battle tested HR “armies of one” so successful. Download it by clicking below.
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