As your small business approaches the 50-employee mark, it’s important to prepare for some of the regulatory changes you will need to face. By preparing for these regulations in advance, you can ensure your company is fully compliant. When in doubt, you can reach out to a professional HR and payroll provider to learn more about your obligations as a small business.
The 50-Employee Milestone: Federal Regulations You Need To Be Aware Of
While states and municipalities have different rules, there are a few common regulations that employers must follow after they hit 50 employees. Although the Affordable Care Act (ACA) and Family Medical Leave Act (FMLA) are some of the important requirements, there are several other regulations you need to be aware of.
Affordable Care Act Reporting and Employer Shared Responsibility Provision
Under the ACA, employers that have at least 50 full-time equivalent (FTE) workers must offer health insurance that meets a minimum standard. This is known as the employer shared responsibility provision.
You are also subjected to ACA reporting rules, which require all applicable large employers (ALEs) to give Form 1095-C to eligible employees each year. ALEs, which are any organization with 50 or more FTEs, must also complete form Form 1094-C.
Family Medical Leave Act
The FMLA kicks in once you reach at least 50 employees for 20 weeks of the year. These employees must also be located within 75 miles.
Under the FMLA, you must let workers take leave for qualified medical and family-related reasons. For example, an employee may go on leave to care for their newborn or receive chemotherapy.
Unlike some state and local laws, the FMLA doesn’t mandate any pay requirements. Unless your state has different laws, you are not required to pay employees during their time off. Instead, you only have to hold their job for them.
Employee Benefit Plans (Form 5500)
If you offer a retirement plan, like a 401(K) or profit-sharing plan, you must file Form 5500 each year. However, many small businesses have a third-party administrator complete and turn in this form for them, so there are ways you can simplify your reporting process.
EEO-1 Reporting
This compliance reporting is required for federal contractors that have 50 or more employees. It is also required from any employees that have 100 employees or more. Each year, your business is required to submit demographic data about your workers. In addition to being used for discrimination enforcement, EEO-1 reporting is also used by employers to track their progress on inclusive hiring practices and promotions.
Regulations That Apply If You Have 15 or More Workers
As soon as you reach 15 workers, there are several different regulations that will kick in. The following rules take effect once employers have 15 to 49 employees. To ensure your company’s legal compliance, make sure to adopt the following regulations.
Pregnant Workers Fairness Act (PWFA)
The PWFA applies as soon as you have 15 or more employees. At its heart, this legislation requires businesses to provide reasonable accommodations for pregnancy-related complications. For example, the workplace may be expected to change uniforms, provide extra bathroom breaks, or offer a chair for the worker to sit in.
Title VII of the Civil Rights Act
Title VII prohibits discrimination based on protected classes, such as color, race, national origin, sex, or religion. It takes effect after you have at least 15 workers.
For workplaces, this means you must be extremely cautious about not asking discriminatory questions during interviews or making discriminatory hiring decisions. Similarly, you’ll need to think about the way you promote, terminate, train, and reward your workers.
Pregnancy Discrimination Act (PDA)
The PDA was adopted as an amendment to Title VII because pregnancy wasn’t originally included. The PDA clarified that pregnancy discrimination is a form of sex discrimination. Thanks to the PDA, pregnant workers can’t be fired for taking leave, denied a promotion, or discriminated against in other ways. Like Title VII, the PDA kicks in once you have 15 workers.
Americans with Disabilities Act (ADA)
Under the ADA, employers are prohibited from discriminating based on someone’s disability. It also prohibits discrimination in other arenas, such as transportation, telecommunications, and local government. As an employer, you’re required to follow the ADA once you reach 15 employees.
Title II of the Genetic Information Nondiscrimination Act (GINA)
GINA prohibits employers from using genetic information in any of their employment decisions. For example, some employers like to check social media before hiring someone. During this check, they might notice comments from the applicant, such as a family history of heart disease or cancer. If the employer decides not to hire the individual because they don’t want to deal with future illnesses, they would be violating GINA. Like the previous laws, GINA takes effect once you have 15 employees or more.
Medicare Benefits Coordination
Unlike the previous regulations, Medicare benefits coordination begins when you have 20 workers. If you provide your workers with health benefits, those benefits must pay for medical services before Medicare is used. However, if the employer has less than 20 workers, Medicare pays first.
Don’t Forget About State Laws
As you grow from 15 to 50 employees, it’s important to keep in mind that there are also state regulations that apply as you grow. For instance, many states have specific laws about paid leave. To ensure your company is in compliance, you need to gain a thorough understanding of the laws in the state where you do business.
Prepare Your Company for Crossing the 50-Employee Threshold
With the right HR and payroll provider, you can learn more about changing regulations as your company grows. A top provider offers compliance libraries and expert advice, so you don’t have to worry about forgetting an important regulation.
To learn more about which regulations apply to your small business, reach out to our team of small business HR and payroll experts today.