Businesses must stay abreast of an alphabet soup of federal laws—ADA, ADEA, FMLA and so forth—each with its own requirements. Some apply only to employers with more than 50 employees. Others come into play if you have only one. If you have federal contracts, your threshold may be based not on how many workers you have but the value of your contracts.
Further complicating matters, most states have their own laws that override the federal requirements. To comply, you first must know which laws apply to your business, based on the number of people you employ.
Number of employees: Who counts?
Part-time help: If your payroll varies from week to week, the government will consider your count during the 20 weeks with your highest staffing levels in each calendar year. In other words, if your business is big enough to meet the threshold for 20 weeks out of any calendar year, you are a covered employer for that year. An employee who works only one or two days of the week counts as an employee for that week.
Temporary workers: Temporary employees count, even if you contract for them through an employment agency.
Illegal immigrants: Workers count regardless of their citizenship, and are covered by all the federal anti-discrimination laws.
Independent contractors: Independent contractors are their own employers and do not count.
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What about subsidiaries and affiliated companies?
What if you’re a small employer affiliated with a larger company? The government may consider you an “integrated enterprise” if you share payroll, management or other significant relationships. In that case, the employees of all related companies count toward your employee tally.
Thresholds for major federal laws
ADA—15 employees: The ADA prohibits employers with 15 or more workers from discriminating against employees or applicants because of disability or perceived disability. In addition, facilities that are open to the public must be accessible, regardless of the number of employees.
Title VII—15 employees: Title VII of the Civil Rights Act prohibits employers from discriminating against employees based on race, color, religion, sex and national origin. Many states have statutes reducing the employer-size threshold and expanding the classes of protection.
ADEA—20 employees: The Age Discrimination in Employment Act prohibits companies with 20 or more workers from discriminating against people age 40 or older in hiring, firing, wages and benefits.
COBRA—20 employees: The Consolidated Omnibus Budget Reconciliation Act mandates continuing coverage when an employer with 20 or more workers offers health coverage.
FMLA—50 employees: The FMLA grants up to 12 weeks of job-protected, unpaid leave to certain workers in companies with 50 or more employees who work within a 75-mile radius of the work site. Note that you’re not covered until 50 workers are employed “for each working day during 20 or more calendar workweeks in the current or preceding calendar year.”
Workers must be on your payroll for at least 12 months and put in at least 1,250 hours before becoming eligible for FMLA leave. Paid time off, including vacation and sick leave, doesn’t count. The FMLA is an area where states have been active recently. Numerous states have enacted leave laws applying to employers with fewer than 50 employees.
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PDA—15 employees: The Pregnancy Discrimination Act prohibits discrimination on the basis of pregnancy, childbirth and other related medical issues.
WARN—100 employees: The Worker Adjustment and Retraining Notification Act requires companies to give at least 60 days’ notice of closings and mass layoffs. It applies to employers with 100 or more workers. That does not count employees who have worked less than six of the past 12 months or who work an average of less than 20 hours a week.
Laws with no exceptions
The child labor and minimum wage provisions in the Fair Labor Standards Act apply to virtually every employer, and the Equal Pay Act applies even if you have only one worker.
You also must review work eligibility documents under the Immigration Reform and Control Act if you have any employees. And, the National Labor Relations Act governs organizing activity for almost all employers and unions.
All private employers are limited in using lie detectors under the Employee Polygraph Protection Act.
The Occupational Safety and Health Act requires all employers, regardless of size, to provide a safe workplace. The law includes additional mandates for certain industries. But if you have 10 or fewer employees, you’re exempt from programmed inspections.
The Occupational Safety and Health Administration’s new ergonomic rules apply regardless of the number of employees, but they do exclude the construction, maritime, railroad and agriculture industries. Also, some record-keeping provisions apply only to businesses with at least 11 employees.
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