Hitting the 20 Employee Mark Part 1 – New Employment Laws We Advise You to Embrace

In my experience, hitting the 20-employee mark is the most challenging in terms of setting up the employer-employee relationship for long-term success.  You are still small enough that each person is wearing multiple hats but the hats are becoming more complex and if you are like most small companies we work with, you want to keep things informal and the idea of “structure” makes you want to “run for the hills.”  That’s just too “corporate” you may be thinking.  I get it and I am actually living it right there with you.  We aren’t quite to twenty yet, but I can see it coming.   As I am getting my own act together, I thought I would share my experience in working with smaller clients over the years as well as what I have learned as I grow Resourceful HR.  This blog as well as next week’s is offered in the spirit of giving you some things to think about as you hit 20. Congratulations on reaching this milestone!  Only a small percent of the employer population actually make it this far.

While you can take time figuring out “who really does what” and “who we are” in the marketplace, new employment laws take hold the minute you hit 20 employees. There is no grace period, period. At the 20-employee mark, employers are required by law to comply with the Age Discrimination in Employment Act of 1967 (ADEA) and, more notably, the Consolidated Omnibus Budget Reconciliation Act (COBRA). Many employers choose to ignore them but I don’t advise it.  It gets a lot more expensive and harder to avoid being “found out” by your employees and the Department of Labor (DOL) as you grow.  Audits are becoming more frequent and employees are becoming more attuned to rights and laws in the workplace.

The Age Discrimination in Employment Act of 1967 (ADEA) prohibits “age discrimination in hiring, promotions, wages or termination and layoffs of anyone at least 40 years of age”. Last year, 23% of the 2012 total discrimination claims were for age discrimination.  I won’t spend a ton of time on this one as I think it’s pretty self-explanatory.  Moral of the story is, don’t discriminate based on age. To avoid getting sued for age or other forms of discrimination hire based on skills and diversified work experience that can add to your team.

COBRA deserves some greater attention, mainly because the administration can be complex.  There are lots of dates to remember when administering COBRA. Your calendar reminders will become your best friend. COBRA gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances such as voluntary or involuntary job loss, reduction in hours worked, transition between jobs, death, divorce and other life events. Tracking starts with the covered employee’s first day of work.  You are required by law to send the COBRA notification to the employee’s home through snail mail to help ensure that all covered dependents have the opportunity to receive the notification.  Then as the employee works for you, you need to ensure you send COBRA notifications to any added or dropped dependents on your health plans. Be aware of which eligibility schedule a dropped dependent qualifies under and then monthly track any COBRA payments you receive to ensure the participant is in compliance. Specific information on qualification and administration is available here and we are also happy to answer any questions.

Getting to 20 is an incredible milestone and one to be proud of.  It generally means you’re on a growth cycle and it’s exciting to plan for your company’s future.  In next week’s blog, I’ll give some food for thought around communication, culture, performance management and what’s really needed around policy development when hitting 20 employees.  I hope you’ll stay tuned…

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"My professional passion stems from a fascination with how the individual needs of employees, managers, and the business converge to produce an outcome. I’m driven by a desire to help leaders and employees find the balance between competing needs so they can work together to address the challenges they face."