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Small business owners wear a lot of hats, especially when they first launch their companies. Accountant, manager, payroll specialist, benefits administrator, and HR generalist may be among the roles owners adopt while trying to build a successful business. Doing so in those initial years makes financial sense, typically, but once a company has taken root, growth — especially rapid growth — might necessitate looking for help with back of the house tasks so leadership can focus on core competencies that will build revenue.

Fortunately, business owners facing this dilemma can turn to a Professional Employer Organization (PEO) like Resourcing Edge to help manage growing pains. Resourcing Edge partners with companies to handle their benefits, HR, payroll, and risk, so that worksite managers have plenty of time to strategize and plan for increasing market share and profit. A PEO can be particularly helpful when a small business has grown to the point various legal compliance issues are triggered.

When businesses rapidly grow, a host of compliance issues can arise. Most frequently, business owners enjoying a growth spurt run into headaches with legal requirements for a host of local, state, and federal laws. Rapid growth might also require changes to internal policy and procedures in order to comply with current best practices.

Legal Compliance

A PEO cannot provide legal advice, but its HR professionals do understand how to keep clients compliant with employment laws. And, if there are issues that must be handled by an attorney, Resourcing Edge has access to employment lawyers for referrals.

When companies grow and add employees, laws that not previously applicable to an employer may become so, such as:

  1. Title VII of the Civil Rights Act: The federal anti-discrimination statute applies to all private employers with more than 15 workers. Note, however, that some states have similar provisions that may be applicable to employers with less than 15. For example, in Ohio the state anti-discrimination statute applies to businesses with at least four employees.
  2. Age Discrimination and Employment Act (ADEA): Employer with 20 or more workers are subject to this federal act to prohibit discrimination against employees 40 and older.
  3. Americans with Disabilities Act (ADA) (aka Americans with Disabilities Act Amendments Act (ADAAA)): This federal act protects disabled, or those perceived to be disabled, from discrimination in the workplace. It applies to private employers with 15 or more employees.
  4. Family Medical Leave Act (FMLA): Pursuant to this federal act, businesses with 50 or more employees must provide at least 12 weeks of unpaid leave to employees for their own, or a family member’s, serious medical condition.
  5. Affordable Care Act (ACA): Under the ACA, employers with more than 50 employees are subject to the “employer shared responsibilities provision,” which requires they offer minimal essential coverage or pay the IRS for not doing so. (Some of the ACA provisions are under challenge or have been suspended, like the individual mandate, but most are still in place currently.)

By partnering with a PEO such as Resourcing Edge, our HR pros relieve you of the responsibility for staying compliant with these laws as well as those on a state and local level.

Best Practices

In addition to legal compliance issues that expand as a business grows, increased size typically means more employees and the need for updated policies and procedures. A PEO has the resources to guide your company through the growing pains and develop the policies you need to manage your workforce and be attractive to new hires.

Some of the areas a PEO can help with best practices include:

Handbooks. Clients are covered by a legally compliant base handbook upon onboarding with Resourcing Edge. Depending on the client needs, handbooks can be customized somewhat to include important policies to your business. As your business increases in size, those policies may need to be revised and the HR Services group at Resourcing Edge will make that happen.

Discipline. More people can mean more employee issues. By having a team of HR experts at your service through a PEO, you can ensure best practices are used to mitigate your company’s risk around discipline and terminations.

Training. Best practices (and even some local and state laws) requires annual anti-discrimination and anti-harassment training. When you are just starting out with a few employees, such training likely isn’t high on your priority list. But as your company grows and fills seats, it is necessary and, in some places, mandatory. Resourcing Edge has online and in person training options for your workforce.

Job Descriptions. Non-compliant job descriptions that don’t follow best practices can put employers at risk. By defining essential job functions, when your company is subject to ADA, you will know what reasonable accommodation might be made. Job descriptions are also important if there is an issue about unemployment benefits.

There are many other areas PEOs can help with as your business grows, from managing benefits to providing workers’ compensation. Resourcing Edge even has a recruiting department that you can contract with for your direct hire needs as the business expands. The expertise of this group will keep you compliant in all the areas related to hiring, such as interviewing and background screening.

Rapid business growth is a welcome thing. But with it comes compliance issues that must be addressed. Contact us today if you’d like to know more about how Resourcing Edge can help your business grow.

Kim Freeman is the Director of HR Services at Resourcing Edge, and a licensed attorney. The information presented in this article is for informational purposes only and does not constitute legal advice or create a lawyer-client relationship.

Kim Freeman, JD, Director of HR Services
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