Important changes when 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.
Expanded HR Operations
Enhanced HR Policies and Procedures: The expansion necessitates a comprehensive review and likely overhaul of your HR policies and procedures. This includes updating your employee handbook, refining your onboarding process, and ensuring your policies comply with labor laws applicable to larger businesses, such as those related to anti-discrimination, health and safety, and employee benefits.
HR Technology and Systems: To efficiently manage a growing workforce, investing in HR technology becomes imperative. Systems for applicant tracking, employee management, benefits administration, and compliance reporting will streamline operations and ensure accuracy in record-keeping and reporting.
Training and Development: With a larger team, focusing on professional development and training programs is essential to foster growth, improve employee engagement, and reduce turnover. This may involve implementing leadership training, skill development workshops, and performance management systems.
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.
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.
Care to learn more? Schedule a free consultation here.