As your organization grows, so do your responsibilities—not just to your employees but also to federal and state regulations.
Many companies focus on tracking growth metrics like revenue, profit, and headcount, but there’s one critical factor often overlooked: compliance requirements tied to employee count.
Failing to recognize how compliance obligations shift with each growth milestone can leave your organization vulnerable to legal risks, fines, and operational disruptions. In this blog, we’ll break down the key compliance milestones every growing business should know—from your first hire to scaling beyond 100 employees—and how to ensure your employee handbook keeps pace with these changes.
Important Note: The compliance tips and regulations shared in this blog are some of the most common requirements we encounter. However, this is not an exhaustive list. Your specific obligations may vary based on your industry, location, and other factors. For a comprehensive review tailored to your organization, consider a Policy Audit with Greater Human Capital.
Why Employee Count Matters for Compliance
Your employee count isn’t just a number—it’s a legal threshold. Different laws kick in based on how many people you employ, impacting everything from leave policies and healthcare benefits to reporting requirements and workplace safety regulations.
Without regular updates to your policies, particularly in your employee handbook, you risk falling out of compliance. This can result in costly penalties, lawsuits, and even damage to your company’s reputation.
Compliance Milestones by Employee Count
Understanding when new legal obligations apply can help you stay proactive. Here’s a breakdown of key compliance requirements based on workforce size:
1–9 Employees:
Small businesses often operate under state-specific regulations.
- State-Mandated Sick Leave: Many states require mandatory sick leave policies, even for businesses with just one employee.
- Anti-Discrimination Laws: Federal laws like Title VII typically apply to businesses with 15+ employees, but some state laws cover smaller employers.
- Wage and Hour Laws: Compliance with the Fair Labor Standards Act (FLSA) applies regardless of size, covering minimum wage, overtime, and recordkeeping.
Pro Tip: Even with a small team, an updated employee handbook can help clarify rights and responsibilities, reducing legal risks, and setting you up to grow.
10–24 Employees:
As your organization grows, so do compliance complexities.
- Family Leave Requirements: Certain states have family leave laws that kick in once you reach 10 employees.
- Small-Group Health Insurance Laws: Depending on your state, insurance mandates may apply, including eligibility for group health plans.
- ADA Compliance: The Americans with Disabilities Act (ADA) applies to employers with 15+ employees, requiring reasonable accommodations for disabled workers.
Risk Alert: Failure to update policies as you cross these thresholds can lead to discrimination claims or benefit-related compliance issues.
25–49 Employees:
This is a critical growth stage where federal laws begin to apply.
- COBRA Compliance: If you offer health insurance, you’re required to provide COBRA continuation coverage for departing employees.
- Benefits Reporting: Enhanced requirements for benefits administration, including retirement plan disclosures and healthcare summaries.
- Equal Pay Act & Anti-Harassment Laws: Broader enforcement of pay equity and workplace harassment prevention regulations.
Pro Tip: A robust HR compliance checklist and regular handbook reviews can help you stay ahead of these obligations.
50–99 Employees:
Crossing the 50-employee mark triggers significant federal mandates.
- Family and Medical Leave Act (FMLA): Requires up to 12 weeks of unpaid, job-protected leave for qualifying employees.
- Affordable Care Act (ACA): Employers with 50+ full-time equivalent employees must offer affordable health insurance or face penalties.
- OSHA Compliance: Enhanced workplace safety reporting and injury tracking obligations under OSHA regulations.
Risk Alert: Many companies hit 50 employees without realizing the ACA’s “employer mandate” applies, leading to hefty fines. Regular policy audits are critical.
100+ Employees:
At this size, federal oversight becomes more stringent.
- EEO-1 Reporting: Mandatory annual reporting of workforce demographics to the Equal Employment Opportunity Commission (EEOC).
- Advanced OSHA Regulations: More comprehensive safety programs, recordkeeping, and inspections.
- Benefits Expansion: Larger employers often face additional benefit requirements under federal law, including mental health parity and advanced healthcare disclosures.
Don’t Forget: The complexity of compliance at this stage often requires dedicated HR professionals—or better yet, customized employee handbook solutions to keep policies aligned with legal standards.
The Hidden Risks of Non-Compliance
Ignoring these milestones can have serious consequences:
- Lawsuits: Employee claims related to discrimination, unpaid wages, or wrongful termination can be costly and damaging to your reputation.
- Operational Disruptions: Investigations, audits, and legal proceedings divert time and resources from growing your business.
- Legal Penalties: Fines for non-compliance can reach thousands—or even millions—of dollars.
Surprisingly, many of these risks stem from something as simple as an outdated employee handbook. If your handbook doesn’t reflect current laws tied to your employee count, you could be exposed to unnecessary liabilities.
How Greater Human Capital Can Help
At Greater Human Capital, we understand that as your business scales, so do your compliance challenges. That’s why we’ve developed Handbook Solutions and our new Policy Audit service—designed to help you identify gaps in your current policies and ensure your employee handbook grows with your company.
What’s Included in Our Policy Audit?
- Custom Compliance Reviews: Tailored to your organization’s size and industry.
- Gap Analysis: Identifying outdated or missing policies that could put you at risk.
- Actionable Recommendations: Clear steps to align your employee handbook with current legal requirements.
Regular policy audits aren’t just for large corporations—they’re critical for businesses at every stage of growth.
Is Your Employee Handbook Keeping Up with Your Growth?
Don’t let compliance issues catch you off guard. Contact Us for a Policy Audit to uncover hidden risks and ensure your employee handbook, policies, and benefits are always up-to-date.
Your employee count isn’t just a number. It’s the key to staying compliant, protecting your business, and fostering a thriving workplace.