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Turning Fifty: Growing Pains For Successful Businesses

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Turning Fifty: Growing Pains For Successful Businesses

By Shawn L. Pearson, Attorney

As an attorney who assists small businesses grow, I often ask clients, “What’s your growth strategy?”  Most often, I learn that company size is not a major consideration for business owners.  That’s understandable when customer service, developing new clients, supply chain management, and a myriad of other issues bring day-to-day challenges. But, successful business owners should pause to consider the host of legal regulations that come with reaching the 50-employee threshold.  The following laws apply to employers with 50 or more employees:

  • Family & Medical Leave Act (FMLA): Applies to employers with 50 or more employees in a 75-mile radius of the work site. Company must have had 50 or more employees for at least 20 workweeks in the current or preceding year. Employees must work at least 1,250 hours per year and be employed for 12 months to qualify for 12 weeks of unpaid FMLA leave. Employers must not retaliate or interfere with leave.
  • Affordable Care Act (ACA): The employer mandate to offer health care insurance applies only to employers with 50 or more full-time plus “full-time equivalent” employees. Employers must use caution to understand how to calculate full-time equivalent employees under the ACA. Additionally, under the ACA, employers with 50 or more employees must provide “reasonable break time” for hourly employees to express breast milk in “a place, other than a bathroom, that is shielded from view and free from intrusion from coworkers and the public.”
  • Affirmative Action/Executive Order 11246: Employers with 50 or more employees and $50,000 in government contracts (or subcontracts) must have an Affirmative Action Plan (AAP) and actively recruit qualified minorities, women, persons with disabilities, and covered veterans. For construction companies that receive at least $10,000 in federal funds either directly or indirectly, there is no employee threshold. The Office of Contract Compliance Programs (OFCCP) enforces these regulations and routinely issues fines and penalties for non-compliance.
  • State of California: Employers with 50 or more employees doing business in California must provide supervisory employees with 2 hours of interactive sexual harassment training and education every 2 years. This law has no requirement that all 50 employees work in California.

For smaller companies that have not reached the 50-employee threshold, other employment laws apply as follows:

  • Age Discrimination in Employment Act (ADEA): Prohibits companies with 20 or more workers from discriminating against people age 40 or older in hiring, firing, wages and benefits.
  • Americans with Disabilities Act (ADA): Prohibits employers with 15 or more workers from discriminating against employees or applicants based on disability or perceived disability. Also, facilities that are open to the public must be accessible, regardless of the number of employees.
  • Title VII of the Civil Rights Act (Title VII): Title VII prohibits employers with 15 or more employees from discriminating against employees based on race, color, religion, sex and national origin. Aggrieved employees may file a Charge of Discrimination to begin an agency investigation.
  • Consolidated Omnibus Budget Reconciliation Act (COBRA): Requires employers with 20 or more employees to offer post-employment health care coverage at employee’s own cost.
  • Pregnancy Discrimination Act (PDA): Prohibits employers with 15 or more employees from discriminating on the basis of pregnancy, childbirth and other related medical issues.
  • Immigration Reform and Control Act of 1986 (IRCA): Prohibits employers with 4 or more employees from discriminating on the basis of citizenship and natural origin discrimination.

In addition these federal laws, some states’ laws apply more stringent requirements. For instance, most Minnesota employment laws (wage/hour, discrimination, whistleblower, etc.) apply to companies having one or more employees.
A successful business can be measured by growth, but growth can trigger more regulations and scrutiny. Grow wisely.
Shawn Pearson represents clients of all types and sizes. For additional information on how you can protect your business from legal risk, please contact Shawn:

Email: spearson@obermanthompson.com

Phone: 612) 217-6442.

 

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