It may have started out as a side project, but now you have a full-fledged business with new needs like payroll, healthcare, and insurance. As your company scales and begins increasing its headcount, human resources needs to keep up and adapt to the evolving needs of the organization. If not, challenges can quickly become hazards that can hamper your organization’s success from the very start.
Many businesses choose to outsource the HR function to a Professional Employer Organization (PEO), with more than 80 percent of U.S. firms outsourcing at least one HR function, according to research by Gartner, Inc. Speak with the professionals at Resourcing Edge to learn about strategizing your company’s growth plan, including individual coaching, job design, and training programs.
While the role of HR changes depending on size, industry, and employee needs, below are some common issues that occur at different stages of company growth. This overview is not meant to be exhaustive, does not include any local or state requirements, and should not be construed as legal advice. If you have any questions about remaining compliant with employment laws, contact Resourcing Edge.
2-19 Employees
In the early stages, the small business owner often handles the human resources tasks, taking on things like payroll, hiring, and training. But it soon becomes obvious that they can’t do everything themselves. Other parts of the business need their attention. This is when it’s important to know when to delegate and when to get involved.
Once HR-related duties start getting in the way of productivity and profitability, it’s time to contact a Certified Professional Employer Organization. By outsourcing more administrative duties to a PEO, you can free up time to focus on things like sales, recruitment, training, and retention.
HR Basics
There’s a lot more to HR than the items listed below, but it’s where most businesses start:
- Payroll
- Employee file, including I-9s and W-4s
- Leave requests and workers’ compensation claims
- Required state and federal compliance posters
- Recruiting, hiring, and termination process
- Compliance with federal, state, and local employment laws
- Employee handbook
- Safety program (for some industries)
Employment Law
All employers
In addition to local and state regulations, employers of all sizes must adhere to many federal laws, including:
- Equal Pay Act (EPA)
- Employee Polygraph Protection Act
- Fair Labor Standards Act (FLSA)
- Occupational Safety and Health Act (OSHA)
- Immigration Reform and Control Act (IRCA)
- Employee Retirement Income Security Act (ERISA)
- Federal Insurance Contributions Act (FICA)
- Fair Credit Reporting Act (FCRA)
- Health Insurance Portability and Accountability Act
- Uniformed Services Employment and Re-Employment Rights Act (USERRA)
- Consumer Credit Protection Act (CCPA)
- National Labor Relations Act (NLRA)
- Health Insurance Portability and Accountability Act (HIPAA)
- VETS-4212
- Jury Systems Improvement Act
Employers with 15 or more employees
The more employees you have, the more compliance requirements you have under federal law. The following federal laws apply to employers with 15 or more employees:
- Americans with Disabilities Act (ADA) and its Amendment Act (ADAAA)
- Age Discrimination in Employment Act (ADEA)
- Genetic Information Nondiscrimination Act (GINA)
- Pregnancy Discrimination Act (PDA)
- Title VII of the Civil Rights Act of 1964
Insurance
You may want or need the following types of insurance:
- Workers’ compensation insurance (required for most employers in most states)
- General liability insurance
- Property insurance
- Commercial auto insurance
- Professional insurance
- Directors and officers insurance
- Employment practices liability insurance
HR Extras
At the small business stage, you may not be able to offer everything on this list, but they’ll become increasingly important as you grow:
- Health, retirement, and other benefits
- Paid time off policies
- Defined career paths
20 to 49 Employees
This is the point when most employers begin promoting people to management roles and employees start asking about their career paths and opportunities for growth and promotion. To help transition to a medium-sized business, companies with 20 or more employees typically require an internal HR professional who can handle a range of tasks, including recruitment, training, company policy, and more. While it’s important to embrace technology and outsource administrative duties, an in-house HR person is in the best position to focus on more specialized human resource services.
HR Basics
All of the essential HR functions are the same as a company with 2-19 employees, but now it’s time to formalize your company’s policies and procedures:
- Updated job descriptions
- HR policies and procedures
- Training and development programs
- Employee relations
Employment Law
Employers with 20+ employees
- Age Discrimination in Employment Act (ADEA)
- Consolidated Omnibus Budget Reconciliation Act (COBRA)
HR Extras
- Health, retirement, and other benefits
- Employee wellness programs
- Paid time off policies
- Defined career paths
- Perks and workplace improvements
50+ Employees
HR Basics
Once your company hits the 50-employee mark, there are a host of new HR responsibilities. In addition to new laws and regulations, the HR department must now shift to “higher-value activities” and play a more strategic role:
- True partnership with management
- Oversee recruiting and performance management program
- Skills training and development programs
- Compensation philosophy and structures
- Employee relations
- Liability management
- Competitive benefits package
- Employee rewards and recognition program
- Review of workplace, company culture, perks, and wellness plans
Employment Law
Employers with 50+ Employees
Once a company grows to 50 or more employees, it is considered an applicable large employer (ALE) and is subject to new federal and state regulations:
- Family and Medical Leave Act (FMLA) – Eligible employees are entitled to up to 12 weeks of unpaid, job-protected leave a year.
- Affordable Care Act (ACA) – Employers are required to provide minimum essential health coverage to full-time employees or risk a penalty. Compliance must be demonstrated to the IRS using 1095-C and 1094-C forms.
- Affirmative Action – Employers with more than $50,000 in government contracts must develop a develop a written Section 503 Affirmative Action Plan
- EEO-1 Reporting – You are required to file the EEO-1 report annually if you have 50 or more employees and a government contractor worth $50,000 or more.
- Form 5500 – To meet ERISA requirements for health and welfare plans, Form 5500 must be filed annually.
State laws may require further action from you, such as sexual harassment training and education.
Employers with 100+ employees
- Annual EEO-1 Reporting
- Worker Adjustment and Retraining Notification Act (WARN)
- Uniform Guidelines on Employee Selection Procedures
HR Extras
With such a high number of employees, the more structure, the better:
- Formal employee mentoring program
- Formal employee feedback process, including stay interviews
- Well-defined career paths and succession planning
- Automated HR software, including employee self-service
- Retirement plan, such as 401(k)
- Employee turnover analysis
- Predictive analytics
Scaling HR for Rapidly Growing Businesses
Congratulations on your growing business! Rapid growth is great, but amid the excitement, many problems can develop, such as compliance and employee performance issues. That’s why it’s important to find a trusted human resources company to help ensure HR best practices.
Speak with the HR professionals at Resourcing Edge to come up with a growth plan for your business’ HR needs. When you have a Certified and Accredited PEO to lean on, you can relax knowing all your HR responsibilities are taken care of, including:
- Payroll & Tax Administration
- Benefits Administration & Consultation
- Risk Management & Compliance
- Time & Attendance
- Robust Web-Based Management Software
- Full Spectrum of HR Services
Contact Resourcing Edge to learn how we can help your business grow with confidence.
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