Rules to Follow on 1 to 100+ Employees Compliance Checklist

There are a few milestones that stand out when running a business. Hiring your first employee, serving your first customer, opening up a new location, or celebrating a big anniversary. While these moments are exciting for any growing company, with each employee you add, your business may be subject to a new set of rules. Those rules can easily sneak up if you don’t know what to look for. Here’s what you should watch for as your company hits each milestone.

10+ Employees Compliance

Hiring your first 10 employees is a commendable milestone. From that point forward, business owners should prepare for various federal employment laws to kick in.

OSHA Recordkeeping

Once your business reaches upwards of 10 employees, Occupational Safety and Health Administration (OSHA) record-keeping rules kick in. Records of serious work-related injuries and illnesses must be kept and maintained at the workplace for at least five years. Additionally, each February through April, businesses must post a summary of injuries and illnesses that occurred the previous year.

15+ Employees Compliance

Congratulations on hitting that 15-employee mark! While it’s only five employees extra, it marks the beginning of some other provisions.

Title VII of the Civil Rights Act

Once you hit the 15-employee mark, Title VII of the Civil Rights Act applies. Title VII prohibits discrimination based on race, color, religion, gender, pregnancy, or national origin. Violation of Title VII results in penalties and punitives, though the limit of said penalties depends on how many employees a business has. It applies beginning at 15 employees and continues as follows.

• 15-100 employees – maximum of $50,000
• 101-200 employees – maximum of $100,000
• 201-500 employees – maximum of $200,000
• 500+ employees – maximum of $300,000

20+ Employees Compliance

Getting to the 20-employee mark is a major accomplishment. It comes with additional responsibilities for employers and businesses, many of which involve compliance with one health act or another and federal regulations around health insurance.

COBRA Coverage

At 20 or more employees, businesses are required to offer their employees COBRA coverage. The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a federal law that allows employees and their families to temporarily keep their employer healthcare coverage. Coverage must be provided when a worker quits, is terminated—for reasons other than misconduct—or loses eligibility for healthcare due to a reduction in hours. Businesses are required to offer COBRA coverage as soon as they have twenty full-time employees for half of the previous calendar year.

Medicare Benefits

You’ll also need to take over the coordination of Medicare benefits when you hit 20 employees. Knowing how to answer employees’ questions accurately and knowledgeably builds up brand loyalty no matter the topic. But if your business has employees 65 years or older, you may encounter questions about how their Medicare works with your employer-sponsored healthcare plans. Which coverage pays first?

Your answer depends on how many employees you have. If you have less than 20 employees, Medicare typically pays first, and then their employer healthcare kicks in second. However, once your business reaches 20 employees or more, then the employer-sponsored kicks in first, followed by Medicare second. If that’s the case, advise employees to tell their doctors to bill Medicare secondarily.

50+ Employees Compliance

Hiring 50 or more employees is the next milestone, so the markers are getting more spaced out as businesses grow. There are some major regulations attached to businesses of 50 or more employees, so employers must educate themselves properly.

FMLA

If you’ve reached 50 or more employees, the Family Medical Leave Act (FMLA) is a big one. FMLA is a federal law that allows employees to take 12 weeks of unpaid, job-protected leave. Sometimes life happens and employees should be protected if they need time to look after their health or the health of a family member or new child. Public or private schools are required to offer FMLA regardless of employee headcount.

ACA

Businesses with 50 or more employees must also follow Affordable Care Act (ACA) laws. This is particularly important when it comes to the ACA’s reporting rules. Under the ACA, employers must report health insurance coverage on an annual basis and share this information with the IRS (Form 1094-C) and employees (Form 1095-C) for their tax purposes.

Affirmative Action Program

If you have 50 or more employees and have over $50,000 in work on government contracts, you’ll need an Affirmative Action Program. This program is your plan to provide equal employment opportunities for women, minorities, veterans, and people with disabilities. It should include your proactive policies and procedure for recruiting, hiring, training, and promoting individuals without discrimination.

100+ Employees Compliance

Once you get beyond 100 employees, you’ll be following nearly all regulations and employee-related acts, along with a few new ones.

EEO-1 Reports

Once you hit 100 employees, the US Equal Employment Opportunity Commission (EEOC) requires that employers fill out and submit an EEO-1 Report. This annual report provides a count of your employees by job category and then by ethnicity, race, and gender. The data is used for a variety of purposes including enforcement, self-assessment by employers, and research. Side note—if you’re a federal contractor, EE0-1 reporting becomes applicable when you reach 50 employees, not 100.

Form 5500

A Form 5500 must be filed annually if your employer-sponsored insurance plans have over 100 “participants.” Participants include employees, COBRA enrollees, and retirees, but not dependents. This form collects data on employees’ benefits, including medical, dental, Section 125, 401(k), and retirement plans. The purpose of Form 5500 is to provide the IRS and DOL with information about your plan’s operation and compliance with regulations.

Additional Requirements

Some government regulations aren’t attached to a particular milestone in terms of number of employees. If you own or intend to start a business, ensure that you comply with the following acts and regulations.

• Fair Labor Standards Act – The Fair Labor Standards Act (FLSA) established a federal minimum wage, mandated overtime pay, regulated child labor, and more. Additionally, it houses important amendments like the Equal Pay Act, which intended to equalize pay between male and female employees. The EPA prohibits businesses from paying an employee less purely based on their sex. In other words, the EPA embodies the idea of “equal pay for equal work.”
• Consumer Credit Protection Act – The CCPA has many facets, but Title III of the CCPA protects employees in the event of wage garnishment. It prohibits employers from discharging employees because of wage garnishment and limits the amount which can be garnished from an employee’s wages.

How to be Compliant

Growing your business is exciting. At the same time, these rules are cumulative and it can be cumbersome to stay compliant. In Colorado, there are even more laws and regulations to keep up with. To help, we put together a guide on the new laws and regulations for this year and what you need to do to comply. But you can always reach out to our team for more support. Don’t let the information discourage you – with a bit of education and guidance, you’ll easily keep your business compliant and in line with the regulations that apply.