All of your hard work is paying off, and your business is growing. You now employ several dozen people, and you’re excited to be approaching the 50-employee mark.
As you’ve probably found out by now, running a company with 50 or more employees is very different from running a small start-up. For one, there are certain regulations and laws that kick in, meaning that you’ll have to change how you do things in order to avoid getting some serious fines.
Two provisions of the Affordable Care Act kick in at 50 employees
If your company has had an average of at least 50 full-time employees over the course of the last calendar year, the IRS automatically classifies your company under the category of “applicable large employers” (or ALEs for short).
Once your company becomes an ALE, you must either provide minimum essential coverage to your employees, or else make an employer shared responsibility payment to the IRS. If you choose to go the route of offering minimum essential coverage, the coverage must be “affordable” and provide “minimum value” to the employees, as defined by the IRS.
ALEs are also responsible for reporting whether they offer health insurance coverage to their employees. You can do this by filing Forms 1094-C and 1095-C with the IRS.
You’ll also have to comply with the Family and Medical Leave Act
The Family and Medical Leave Act (FMLA) applies to any employer with 50 employees or more. It requires you to grant your employees up to 12 weeks of unpaid time off, with job protection, for things such as the birth of a child or a serious illness. This provision extends to circumstances where the serious illness is in the employee’s immediate family and the employee is needed to take care of them.
FMLA guarantees employees the right to take up to 12 weeks off in a 12-month period. This means that, if one of your employees requests more than 12 weeks of leave within a year, FMLA does not require you to grant it to them.
This is a simple overview of the regulations that most private companies must comply with. If your company is a federal contractor, or if you handle a large volume of government contracts, there are additional requirements. It’s a good idea to consult an experienced employment law attorney in order to make sure you don’t get fined for violation of government regulations.
Reaching the 50-employee milestone is an exciting event for any business owner. Ensuring regulatory compliance can be a confusing process, but it’s a necessary step to ensure that your company continues to grow.
