What happens when I hit 50 employees?
What happens when I hit 50 employees?
As your business grows, reaching the 50-employee mark triggers important changes in regulations and benefits. Let's explore what happens when you hit that 50th employee.
In the business world, the number 50 becomes significant. When your workforce reaches 50 full-time or full-time equivalent employees, certain regulations come into play, specifically related to the Family Medical Leave Act (FMLA) and the Affordable Care Act (ACA).
Family Medical Leave Act (FMLA):
FMLA, enacted in 1993, grants eligible employees of covered employers the right to take unpaid, job-protected leave for specific family and medical reasons while maintaining group health insurance coverage. Eligible employees are entitled to:
Twelve workweeks of leave in a 12-month period for reasons such as the birth or adoption of a child, caring for a family member with a serious health condition, or dealing with a personal serious health condition.
Extended leave to care for a covered military member on active duty, including exigency leave and caregiver leave for service members with serious injuries or illnesses.
Once you hit the 50-employee threshold, understanding and complying with FMLA regulations become crucial for your business. More information is available in the Department of Labor's Fact Sheet.
Affordable Care Act (ACA):
The ACA aims to address healthcare disparities, and as a small business, you paid 18% more on average for insurance premiums than larger competitors before the ACA. The ACA initially exempts businesses with fewer than 50 full-time employees from certain provisions.
However, once you reach 50 employees, new healthcare requirements come into play. Your healthcare plan must provide minimum value and be affordable. This means covering at least 60% of the plan’s total cost and ensuring that the full-time employee's share of the lowest cost coverage does not exceed 9.5% of their annual household income.
Non-compliance may result in penalties, and it's important to note that these penalties are not tax-deductible. The ACA introduces complexities, and staying informed about the rules and regulations is essential as your business grows.
In summary, reaching the 50-employee milestone involves navigating FMLA and ACA requirements, impacting leave policies and healthcare benefits. Staying well-informed about these regulations is crucial for the continued success and compliance of your growing business.
If you are growing it would be time to get ahead of this and have a talk. With our experience we have help you build a benefit plan that works for you and your employees.
