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Requirements For Organizations That Reach The 50-Employee Threshold

August 1, 2022, by New City Insurance

group of employees in officeReaching the 50-employee threshold is a sign that a business is growing and that in itself is an accomplishment. However, this milestone also triggers additional compliance requirements for employers. Small businesses with 50 or more employees must adhere to many local, state, and federal labor laws and should understand the potential impact that these regulatory requirements can have on a business.

The implications of crossing the 50-employee threshold can vary from state to state. Most small businesses are required to comply with FMLA, EEO-1 reporting, affirmative action, the ACA, and other state and federal laws.

It is important to note that there are some exceptions to which employees count towards this 50-employee threshold. Learn more about the legal requirements for 50-plus employee organizations and what to consider when approaching this threshold.

Legal Requirements for 50+ Employee Organizations

Organizations that have recently hit the 50-employee mark are required to meet certain legal requirements. It is important to understand these regulations and to discuss them with the organization’s legal counsel to ensure proper HR compliance going forward.

Businesses with between 50 and 99 full-time equivalent (FTE) employees make up approximately seven percent of the private workforce, according to the National Conference of State Legislatures (NCSL). Organizations that have reached this level of success must comply with the following legal requirements:

Family and Medical Leave Act Compliance

Under the Family and Medical Leave Act (FMLA), eligible employees of covered employers are entitled to job-protected, unpaid leave for certain medical and family reasons. A covered employer can be a public agency, a school, or a private-sector employer with 50 or more employees.

fmla actWhen an employee asks for FMLA leave due to an eligible family member’s serious illness or injury or their own serious illness or injury, an organization may request certification from a healthcare provider. Employers may also require a second and third medical opinion, as well as periodic recertification of the serious health condition.

Upon return to the workplace from FMLA leave, the employee must be given his or her original job back or an equivalent job with the same pay and benefits. When an employee uses FMLA leave, this action cannot be counted against the worker based on a “no-fault” attendance policy. Employees must also continue receiving group health coverage while they are on leave.

Affordable Care Act Compliance

The Affordable Care Act (ACA) encourages employers to provide eligible employees with affordable, timely and appropriate health benefits. Any organization that is subject to the ACA must offer affordable health insurance that provides minimum essential coverage to at least 95 percent of their full-time employees.

In regard to the ACA, a full-time employee is considered anyone who works at least 30 hours or more per week or more than 130 hours per month. It is the responsibility of employers to track which employees have fulfilled these criteria and whether or not they would like health coverage.

Employers are also required to provide employees with several pieces of information, including a notice of coverage and available benefits, Form 1095-C (Employer-Provided Health Insurance Offer and Coverage), and a Summary of Benefits and Coverage. Forms 1094-C/1095-C must also be filed with the IRS and applicable state agencies.

Under the ACA, employer-sponsored health plans cannot cost workers more than a certain percentage of their household income. Safe harbor calculators can be used as an alternative method to determine affordability. Certain incentives and wellness benefits that impact the cost of health care can be considered when calculating affordability.

Federal Contractor Requirements

protection helmet on us flagFederal contractors are organizations that enter contractual agreements with any agency or department of the US government to perform a specific job, for the sale of products or services, or to supply labor and/or materials. Part of doing business with the federal government involves federal contractors and subcontractors to meet certain requirements.

Federal contractors are prohibited from discriminating against any job applicant or employee on the basis of sex, race, religion, color, gender identity, sexual orientation, disability, national origin, or status as a protected veteran. They are also required to take affirmative action to ensure that job applicants and employees are treated fairly in regard to all areas of employment, such as recruitment, hiring, retention, promotion, and compensation.

Affirmative Action Plan

An Affirmative Action Plan (AAP) is a type of management tool that employers can use to detail the steps they have taken or will take to ensure that equal employment opportunities are provided to all employees. AAPs outline an organization’s policies, programs, and procedures for recruiting, hiring, promoting and training women, people with disabilities, veterans, and minorities.

The US Department of Labor enforces compliance with affirmative action requirements. There are three main laws that require employers that do business with the federal government to implement affirmative action programs.

  • First, the Rehabilitation Act of 1973 requires any contractor with 50 or more employees and that contracts $50,000 or more to take affirmative action regarding eligible individuals with disabilities.
  • Second, the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 requires contractors to take affirmative action to hire and advance employment for veterans who have service-related disabilities.
  • Third, Executive Order 11246 requires contractors to prepare and maintain a written program that covers the recruitment, hiring, and promotion of minorities and women.

EEO-1 Report

eeoc logoThe EEO-1 report refers to mandatory annual data collection that requires federal contractors with 50 or more employees and private sector employers with 100 or more employees who meet certain criteria to provide demographic workforce data, such as data by ethnicity/race, sex, and job categories.

To ensure compliance, contractors and employers must complete and submit the proper form. Single-establishment companies are required to complete the Standard 100 Form, while multi-establishment companies must file a report covering the headquarters office.

Multi-establishment companies must file a separate report for each branch that has 50 or more employees. They must also complete a consolidated report with all employees who work at branches that have less than 50 employees.

Organizations must ensure that self-identification forms are received from each employee and employee data must be organized by listing employees by job category, location, race, ethnicity, and gender. EEO-1 reports must be completed online on or before the deadline of March 31. Employers must also retain records for a minimum of one year.

Considerations for Organizations Approaching the 50-Employee Threshold

Reaching the 50-employee threshold can be an intimidating experience for HR departments at small businesses. Once this milestone is reached, organizations are bombarded with numerous new reporting and compliance requirements. It is important for companies approaching this point to start preparing for compliance by reviewing current regulations, recruitment demands and local, state, and federal laws.

Here are some things that all organizations nearing the 50-employee mark should consider:

See If Your Benefits Plans Are Subject to Form 5500

Form 5500 is a component of the Employee Retirement Income Security Act (ERISA) and is intended to ensure that employee benefits plans are managed in accordance with certain standards. It also ensures that regulators, participants, and beneficiaries have access to the information needed to protect the rights and benefits of participants and their beneficiaries under covered employee benefits plans.

putting coins in glass jar with retro alarm clock for time to money saving for retirement conceptAll retirement plans, such as 401(k) and profit-sharing plans, must file Form 5500 each year that the plan holds assets. There are several versions of Form 5500 based on an organization’s unique situation.

Form 5500 is a general form for most private and public sector businesses with 100 or more participants. Form 5500-EZ is designed for plans with only one participant, such as a single-owner business. Finally, Form 5500-SF is the short-form version for plans that have less than 100 participants.

Ensure Compliance with State Laws

Organizations that have reached the 50-employee level may be subject to certain state regulations, depending on their location. For example, organizations in California that have 50 or more employees are required to provide managers and supervisors with sexual harassment training within six months of them assuming a supervisory position and every two years after that.

Each state is different and some organizations may face more compliance requirements compared to businesses in other states. It is important to perform extensive research to determine what requirements must be met in a particular state and to start preparing for compliance as soon as possible.

Improve Voluntary Benefits Plans

Voluntary benefits, also referred to as supplemental benefits, are benefits offered by employers that are paid for solely or partially by employees through payroll deductions. The biggest advantage of these benefits is that they can be found at group rates that employees would be unlikely to find on their own.

banknotes and icon with text voluntary benefits on a notebook backgroundOffering voluntary benefits plans is an excellent way for organizations to fill coverage voids where traditional benefits do not provide sufficient coverage. Some of the most common types of voluntary benefits include health, dental, wellness, financial, security, and personal benefits.

Many voluntary benefits can be added to an employer’s benefits package at little to no cost to them as employees are often willing to pay for this coverage themselves. Employers who offer popular supplemental benefits often discover an increase in employee productivity, a decrease in employee turnover, and an increase in the talent pool available to them during recruitment.

Speak with New City About the 50- Employee Threshold

While reaching the 50-employee threshold is an exciting milestone that deserves to be celebrated, employers must also consider what changes they will encounter. Working with an experienced employee benefits consulting firm can help organizations prepare for these changes.

New City Insurance is a reputable employee benefits consulting firm that specializes in consulting, benefits, compliance, insurance, and tech services. Schedule a consultation to learn more about the requirements for organizations that reach the 50-employee threshold or contact New City Insurance.

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Carol Zhang
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04:29 06 Mar 22
As a rapidly expanding national media organization, the employee benefits strategy and administration that New City has provided us during our growth has been invaluable. They have been proactive about informing us of the different benefit strategies available to us as we grow as well as managing the additional compliance laws and reporting requirements at each stage of our growth.
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New City Insurance made navigating through all the health insurances super EASY. Their documents are highly informative, professional, and easy to work with. Thank you for making the process of choosing a health plan so simple. You guys are THE BEST!
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Super easy enrollment process. Fast and friendly customer service. If you are looking for an insurance company that is there for you every step of the way I highly recommend New City Insurance.
Rocky Salas
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So friendly, I hope to speak to him again in all my future insurance needs.
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Jose Brena
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Eric Calciano has been extremely helpful in finding and selecting the right insurance coverage for our company. With many options out there Eric assisted us on getting a low cost provider saving more than 20% than from our competitors and providing excellent coverage for our employees.
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Signing up for insurance was quick and easy. Felicity Sundsboe
SFCC
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Jeff Stoltey and his team provide excellent customer service. Jeff has always provided my company SFCC with straightforward options. I went to a larger insurance company only to RUN BACK to Jeff at New City Insurance. I recommend them to anyone needing insurance without hesitation.
Kevin Luby
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Quick, easy & informative. We were able to secure quality insurance for our small business on a tight deadline. Thanks for the help New City.
Theresa Ruybol
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19:30 01 Jul 21
Eric was so great with us. He was very patient and kind as we are a newer smaller organization who is growing rapidly. With that said, we had made our inquiry, he had great rapid response and mostly had to wait on me. Any request that we made and/or questions we had, he was great answering and helping us understand. Then when we were ready for all documents and to move forward, Brendan helped with getting that together and the two of them worked their magic on New City's end to notify me of what was needed, assist me in that process and confirming that all was complete and approved for the coverage. I just want to say thank you all again so much, as insurance has always been confusing to me, and you all made that process go a lot smoother.Thank you
Andrea Ordendorff
Andrea Ordendorff
21:06 07 May 21
I've been working with both Clayton and Brendan for well over a year. As the purchase of our dental practice was delayed well over 14 months they both patiently supported me and continued to make themselves available. When we were officially ready to sign up they made the whole process seamless and super easy. This team is highly knowledgeable, professional, supportive, and efficient! I can't thank them enough for everything they've done.
T W
T W
22:32 30 Aug 20
I love New City Insurance. I never had a good experience dealing with insurance brokers until I started working with Brendan. He’s awesome! He is patient with me and takes the time to answer all my questions. I’m very grateful for all his help and hard work!
Mary Jane Deyette
Mary Jane Deyette
00:57 11 May 20
Jeff Stoltey is so awesome...even thru my company had only two employees, he took the time each year to research and find the best plan for us. The only reason I am leaving New City Insurance is because we no longer have any employees. Thank you Jeff
Alma Ortiz
Alma Ortiz
22:25 23 Feb 20
Brendan was awesome! I couldn't figure out how to pick my plan and he returned my call on a weekend to help me. Outstansing service!
jessica kavanagh
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Brendan was so helpful I definitely recommend him if you’re in need of good help and getting it done promptly. Thankyou so much again.
Tricia DeYoung
Tricia DeYoung
19:49 13 Feb 20
I was very thankful I inquired about this info. with Brendan. He was very helpful so I understand the benefits available much better now. Thank you Brendan.
B Bayer
B Bayer
17:43 24 Sep 19
NCI handled almost everything from start to finish. Clayton and Brendan made the plans easy to understand and walked me through the application process. They got me my ID numbers before my cards arrived so that I could keep an appointment I had already scheduled. My last broker wouldn't have done that. 5 stars!
Jessica Lehr
Jessica Lehr
03:36 07 Jun 19
Our staff was interested in a health plan, but we didn't know how beneficial a solid employee benefits package would be for our business to expand. We'd lose prospective employees because they had more options for their medical insurance which was sometimes more valuable than more pay. The New City team was amazing and gave us as many affordable options as possible so that everyone had their needs met.
Mike McClay
Mike McClay
19:36 03 May 19
My employer uses New City as their insurance broker, and I'm always amazed when I call in for assistance by how knowledgeable and attentive their staff is with my requests. Their online benefits platform makes selecting insurance plans pretty darn easy. I would highly recommend their services.
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