Important considerations that happen when a business has over 50 employees

As your company grows, there are changes when over 50 employees. It stands at a pivotal growth stage, where the complexity of operations, regulatory requirements, and strategic planning significantly escalates. This milestone often triggers a series of new considerations and obligations that require careful navigation. In this article, we’ll explore the key areas of concern including new filing requirements, the expansion of HR operations, and anticipated cost increases, providing a roadmap for business leaders to manage this transition effectively.

New Filing Requirements

ACA Compliance:

Crossing the 50 full-time equivalent (FTE) employees threshold makes your company subject to the Affordable Care Act (ACA) employer mandate. This means you must offer health insurance to at least 95% of your full-time employees and their dependents up to age 26, or face penalties. You’ll also need to navigate new reporting requirements, such as the IRS Forms 1094-C and 1095-C, to demonstrate compliance with coverage provisions.
EEO-1 Reporting:

Companies with 50 or more employees are required to file the EEO-1 report annually with the Equal Employment Opportunity Commission (EEOC). This report categorizes employees by race/ethnicity, gender, and job category, aiming to enforce federal prohibitions against employment discrimination.
FMLA Obligations:

The Family and Medical Leave Act (FMLA) becomes applicable to businesses with 50 or more employees within a 75-mile radius. Eligible employees are entitled to up to 12 weeks of unpaid, job-protected leave per year for certain family and medical reasons, imposing additional administrative responsibilities on your HR team.

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Expanded HR Operations

Expanding your workforce to provide HR policies and procedures while ensuring healthcare and benefits carries substantial financial implications due to increased costs. One approach to mitigate these expenses is by exploring various health insurance options, such as self-funded plans, which can help manage costs while ensuring compliance with Affordable Care Act (ACA) requirements. By carefully evaluating different health insurance plans, businesses can strike a balance between offering comprehensive benefits to employees and controlling expenses. Self-funded plans, for instance, allow companies to directly fund their employees’ healthcare costs rather than paying fixed premiums to insurance providers. This approach can provide more flexibility in plan design and cost management, potentially resulting in savings for the company in the long run. However, it’s crucial to assess the risks associated with self-funded plans and ensure adequate financial safeguards are in place to cover unexpected healthcare expenses.

Moreover, compliance with federal and state regulations necessitates allocating resources for legal consultation, HR personnel, and administrative support, introducing additional costs. It’s essential to budget for these expenses in advance to prevent unexpected financial strain. Regulatory compliance is a complex and evolving landscape, requiring ongoing monitoring and adaptation to ensure adherence to changing laws and regulations. By investing in knowledgeable legal counsel and skilled HR professionals, businesses can navigate these complexities more effectively, reducing the risk of non-compliance penalties and legal disputes. Additionally, leveraging technology solutions for administrative tasks can streamline processes and minimize manual labor, potentially reducing administrative costs over time. Strategic planning regarding leasing terms, technology solutions, and office management is crucial to optimize costs effectively while accommodating the growing needs of the workforce.

Cost Increases

Healthcare and Benefits:

Providing health insurance and other benefits to a larger workforce will significantly increase your costs. Exploring different health insurance options, such as self-funded plans, can help control expenses while meeting ACA requirements.
Compliance and Administrative Costs:

Compliance with federal and state regulations introduces new costs related to legal consultation, HR personnel, and administrative support. Budgeting for these expenses in advance is crucial to avoid unexpected financial strain.
Technology and Infrastructure:

The investment in HR and operational technology, alongside the need for larger physical space to accommodate your growing team, contributes to increased overheads. Leasing terms, technology solutions, and office management need to be strategically planned to optimize costs.

Conclusion

Transitioning from a small to a mid-sized company is a significant achievement, yet it comes with its set of challenges. Proactively addressing new filing requirements, expanding HR operations, and managing cost increases are crucial steps to ensure compliance, operational efficiency, and sustainable growth. Engaging with legal and HR professionals to navigate these changes, alongside strategic planning and investment in technology, will position your company for continued success in its next phase of growth.

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