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50 + Employees: When the HR Compliance Burden Begins and What to do.

03 11 2021

When a company grows to have fifty full-time employees, a milestone is reached, but compliance headaches can start. Fifty is the “magic number” when companies must follow significant regulations, and HR protocols must be put into action. At AspenHR, we provide PEO services to alternative investment managers, RIAs, fund companies and financial companies to ensure they follow federal and state employment laws as they grow.

What changes at fifty employees, and what type of compliance must be followed?

Family and Medical Leave Act (FMLA). FMLA provides certain employees with up to 12 weeks of unpaid, job-protected leave per year. It also requires that their group health benefits be maintained during the leave.

FMLA is designed to help employees balance their work and family responsibilities by allowing them to take reasonable unpaid leave for certain family and medical reasons. It also seeks to accommodate employers’ legitimate interests and promote equal employment opportunities for men and women.

FMLA applies to all public agencies, all public and private elementary and secondary schools, and companies with 50 or more employees. These employers must provide an eligible employee with up to 12 weeks of unpaid leave each year for any of the following reasons:

  • For the birth and care of the newborn child of an employee;
  • For placement with the employee of a child for adoption or foster care;
  • To care for an immediate family member (i.e., spouse, child, or parent) with a serious health condition; or
  • To take medical leave when the employee is unable to work because of a serious health condition.

Affordable Care Act (ACA) Compliance.  Employers with 50 or more full-time employees plus “full-time equivalents” become Applicable Large Employers (ALE’s) under the Affordable Care Act and must:

  • Offer affordable, compliant healthcare coverage to eligible employees.
  • Report those offers of coverage on an annual basis on Form 1095-C to the employee and on Form 1094-C to the IRS.

Form 5500. Form 5500 is used to collect data on employees’ benefits, including insurance and pension plans. The form needs to be completed by any employer who sponsors a plan subject to the Employee Retirement Income Security Act (ERISA). Plans subject to ERISA generally include medical, dental, 401k, and retirement plans. If your plan has under 100 employees, you only need to fill out the short version of the form: Form 5500-SF.

State Employment Laws. Depending on your state, your company may be subject to additional state laws once reaching 50 employees. 

Growing your company to fifty employees is exciting but can bring added stress if you don’t have an HR department to ensure you’re meeting all federal and state employment laws requirements. Partnering with a PEO like AspenHR ensures compliance and can provide HR services to your company before reaching the ‘magic number’ of 50.