As companies grow, so does their compliance burden. And as companies hire more employees, additional compliance burdens often accompany that growth. Some of these burdens arise from laws, regulations, and requirements that were not applicable when they were a smaller-sized employer.
Other burdens are generated by internal company needs or contractual obligations to customers, vendors, or other entities. What’s more, with time, existing compliance programs need regular review and updating to stay relevant and effective in light of ever-changing laws, regulations, and business realities.
Some companies have 50 or 100 employees, and others have 1,000 or more, but what are the obligations that all of these companies share? Whatever your company size, there are legal requirements that you need to consider. But many compliance laws apply only after an organization grows to 50 or more employees.
Below is a guide for employers approaching the 50-employee mark to help their operations run smoothly and abide by the law.
Understanding Compliance for Companies with 50 or More Employees
You’ve done it! You’ve grown your company from a one-person operation to a team of 50 employees. Congratulations are in order, but there’s more work to do.
As your company grows, so does your compliance burden. The trick is knowing what kind of compliance is required once you reach the “magic number” that triggers these additional requirements.
FMLA (Family Medical Leave Act)
Employers with 50 or more employees within a 75 mile radius are subject to FMLA requirements. Under FMLA, eligible employees may take up to 12 weeks of unpaid leave during any 12-month period for certain family and medical reasons without losing their job or health insurance coverage. In some states it is even longer.
Affirmative action is a set of policies and practices designed to eliminate discrimination based on race, color, religion, gender, sexual orientation, or national origin.
You must develop an affirmative action program (AAP) if you have 50 or more employees and at least one federal contract of $50,000 or more. Companies with government contracts of $50,000 or more must also take measures to ensure they’re offering equal employment opportunities.
The EEO-1 requires certain employers to submit demographic workforce data, including data by race/ethnicity, sex and job categories.
Businesses with 100 employees or more must comply with EEO-1 Reporting guidelines, which require employers to submit an EEO-1 report once a year. Likewise, Federal government contractors and first-tier subcontractors with 50 or more employees and at least $50,000 in contracts must file only component 1 data reports.
Form 5500 Reporting
Form 5500 is used to collect data on employees’ benefits, including insurance and pension plans.
A common misconception many business owners have regarding the Form 5500 reporting requirement is that it applies only to large companies. The truth is, a company who sponsors a plan subject to the Employee Retirement Income Security Act (ERISA) needs to complete the 5500 form. Plans subject to ERISA typically include medical, dental, 401, and retirement plans. For employers with under 100 employees, there is a short version of the form available: Form 5500-SF.
Since the Affordable Care Act (ACA) went into effect, health insurance compliance has changed for companies of all sizes. Post-ACA, businesses with 50 or more full-time employees should be asking the following questions:
- Do we have a health plan for our employees?
- If so, does it meet the minimum value and affordability standards of the ACA?
- Which full-time employees will receive coverage (and who will not)?
- What kind of documentation is necessary to prove that we’re complying with the ACA?
The ACA requires employers to provide health insurance to full-time equivalent employees and their dependents, starting at companies with 50 or more full-time employees in 50% of the previous calendar year.
In addition, employers with 50 or more full-time and part-time employees will be subject to the Employer Shared Responsibility provisions under IRC Section 4980H, which can result in a penalty if the company fails to offer affordable coverage that meets the established minimum value.
Review Your Company’s Compliance with Focus HR
Focus HR’s team of local HR experts is dedicated to keeping your employees happy and engaged, leaving you more time to focus on growth.
With services including custom HR strategy, compliance tracking, payroll administration, and employee benefits administration, Focus HR is the perfect solution for companies that want to concentrate on long-term success.
We invite you to learn more about our HR services and how our experts can help your company succeed. We make it possible for you to structure your hiring process and your company’s benefits to be compliant with today’s employment laws.
Request a consultation today and experience the benefits of working with a dedicated HR team by filling in the form below.