Compliance Thresholds 101: Because "I Didn't Know" Isn't a Defense

When you’re starting off and growing your business, there are a lot of things you have to figure out—and quickly. You may be a wiz at whatever it is you do, but now you have to become a salesman, a marketing pro, a finance pro, a contract and legal pro, get all of the insurances (you know, the business ones!), become a recruiter, learn employment law, and so much more. I’m sure your head is spinning.

In addition to all of these hats, as you scale your business, you also have to worry about compliance and thresholds. What even is that? Why are there so many?! Well, don’t worry—your favorite HR professional has your back.

Let’s start off with the basics: very small organizations are rarely subject to many laws simply due to their size. One law that most employers are subject to—regardless of whether they have one or 100+ employees—is the FLSA. I know, I know, you’re tired of the acronyms… buckle in, there are a lot more where that came from!

• The Fair Labor Standards Act (FLSA) - Requires minimum wage,  overtime pay, recordkeeping (aka employee files—with things I’d be happy to discuss with you personally, but won’t go into detail on here), and child labor protections.

In other words:

•  Pay your employees for all hours worked.

• Track their hours for overtime and reporting purposes.

• Make sure you aren’t misclassifying them (hourly vs. salary; contractor vs. full-time or part-time).

• Maintain appropriate records.

• Follow child labor laws.

  
  

• Occupational Safety and Health Act (OSHA) - This act covers most private sector employers and their employees in all 50 states, DC, Puerto Rico, and other U.S. territories. It grants employees the right to file a complaint with OSHA about safety and health conditions in their workplace without fear of retaliation. There are resources available for small businesses to ensure compliance.

  
  

• Uniformed Service Employment and Reemployment Rights Act (USERRA) - This federal law protects military service members and veterans from employment discrimination and ensures their reemployment rights. There are nuances to this law, including duration of service, reemployment qualifications, return-to-work timelines, and exceptions.

  
  

• The Consumer Credit Protection Act (CCPA) - This law protects employees from being discharged by their employers due to wage garnishment for any one debt, and it limits the amount of earnings that may be garnished, per the Department of Labor (DOL).

  
  

• The Immigration Reform and Control Act of 1986 - AKA the law that requires I-9s. This law prohibits employers from hiring or continuing to employ individuals for U.S. employment if they are not authorized. You are also prohibited from hiring anyone—including U.S. citizens—without verifying their identity and work authorization using Form I-9.

  
  

• Taxes - No matter who you are, you’re not getting away from these! Make sure you have a trusted accountant or payroll provider who stays on top of your withholdings and contributions for federal income tax, Social Security, Medicare, FUTA, and SUTA.

Now that we’ve gotten those out of the way (phew!), let’s talk about scaling businesses and the thresholds that trigger certain employment laws:

• Title VII of the Civil Rights Act of 1964 - 15 or more employees

This is the law that prohibits you from discriminating against someone for their race, sex, religion, color, or national origin. Yes, gender identity and sexual orientation are still covered under title vii as per the Supreme Court’s ruling in Bostock v. Clayton County, Georgia, it all falls under protection against discrimination of sex. 

• The Americans with Disabilities Act (ADA) - 15 or more employees 

Prohibits discrimination against individuals with disabilities and requires reasonable accommodations. This applies from the application stage all the way through employment. (I wrote a whole blog on this—feel free to take a look!)

• Age Discrimination in Employment Act (ADEA) - 20 or more employees

Protects employees aged 40 and older from discrimination. Applies to hiring, promotion, discharge, compensation, and more.

• Family Medical Leave Act (FMLA) - 50 or more employees within 75 miles 

While tricky, there are ways an employee could be covered in remote settings. Entitles eligible employees to up to 12 weeks of unpaid, job-protected leave per year for specified family and medical reasons—such as their own serious health condition, the health of an immediate family member, or the birth/adoption/placement of a child (as defined by the Department of Labor).

• The Affordable Care Act (ACA) - 50 or more full-time employees 

Full-time is defined as an average of 30 hours per week or 130 service hours per month. Requires large employers to offer affordable health insurance to full-time employees.

Let’s also talk about E-Verify, especially since there is currently a bill to change the threshold here in my home state of Florida. These are the thresholds as they currently stand. If your state isn’t listed, it either has requirements for public employers and/or contractors only, or doesn’t currently mandate private participation—making it voluntary:

• Alabama - All private employers are required to use E-Verify.

• Arizona - All private employers are required to use E-Verify.

• Florida - Private employers with 25 or more employees must use E-Verify.

• Georgia - Private employers with 10 or more employees must use E-Verify

• Louisiana - All private employers are required to use E-Verify OR retain copies of the work authorization documents.

• Mississippi - All private employers are required to use E-Verify.

• North Carolina - Private employers with 25 or more employees must use E-Verify

• South Carolina - All private employers are required to use E-Verify.

• Tennessee - Private employers with 35 or more employees must use E-Verify

• Utah - Private employers with more than 150 employees must use E-Verify

In addition to Florida, the following states have introduced bills that could impact E-Verify requirements: Idaho, Indiana, Kansas, Montana, Nebraska, Nevada, North Dakota, and Texas.

I hope this helps you navigate those compliance waters a little easier. I’m happy to consult on any and all compliance questions and proudly offer my small to midsize business friends my services. As always, be on the lookout for more compliance and HR topics from me!