Staying small

A mild-mannered business owner interviewed for an article became agitated when we asked one of our staple questions: How many people do you employ?

“Well, we try to stay under 50,” he grumbled.

So why would an owner purposely stunt his company’s growth?

“Because of the governmental laws,” he says. “When you get over 50 employees, you’ve got all these things you’ve got to deal with.”

“These things,” according to Rebecca Osborne, director of human resources at SS&G Financial Services’ Akron and Cleveland offices, are the federal labor laws that apply to businesses as they hire their 20th, 50th and 100th employee. She provides a review of those laws.

20 or more employees

Consolidated Omnibus Budget Reconciliation Act of 1985. Federal law does not require employers to provide health care benefits for their employees. Those who do provide those benefits, however, must allow employees to continue coverage at their own expense under the same plan if they leave their job due to what the Society for Human Resource Management calls a “qualifying event.”

Employees who quit or are fired for reasons other than gross misconduct can continue coverage for up to 18 months, as can workers whose eligibility for health benefits is lost due to a reduction in work hours.

Employees who become disabled can continue coverage for up to 29 months. Spouses and dependent children can continue for up to 36 months after the death of an employee, divorce, loss of coverage as a result of Medicare eligibility, loss of coverage after the bankruptcy of a retired employee’s employer or after a dependent child becomes ineligible under the plan.

Age Discrimination and Employment Act. The ADEA prohibits mandatory retirement, as well as “limiting or classifying employees in any way that adversely affects their status because of age” — for example, discontinuing pension accruals after age 65.

50 or more employees

Family Medical Leave Act. Enacted in 1993, Osborne says it allows an employee to take up to 12 weeks of unpaid leave (including maternity leave, vacation and sick time) during any 12-month period for the birth or adoption of a child; the serious health condition of a spouse, child or parent; or his/her own health condition. During that time, the employer must hold the employee’s job — or a job with equivalent status and pay — until his or her return.

Osborne says the 12 weeks don’t have to be taken consecutively. An employee, for example, could use the time to cut the workday in half for six months.

100 or more employees

Worker Adjustment and Retraining Notification Act. WARN requires employers to give a minimum of 60 days’ notice if a plant is to close or if mass layoffs are to occur. According to The SHRM Learning System-Module Two: General Employment Practices, “WARN affects employers who employ 100 or more, a) full-time employees; or b) full-time and part-time employees who in the aggregate work at least 4,000 hours (exclusive of overtime hours) or more per week at all employment sites.”

Filing of EEO1 Report. The Equal Employment Opportunity Report requires employers to declare the number of males, females, African Americans, Asians, Hispanics, etc., on the payroll. Federal contractors must file an EEO1 report when they have 50 or more employees. How to reach: SS&G Financial Services, (330) 668-9696

Lynne Thompson is a free-lance writer and regular contributor to SBN Magazine.