By Barry Cohn
Do your clients know how many employees they have? Employers must comply with a number of laws and regulations that involve counting their employees such as:
- Title VII of the Civil Rights Act, as amended by the Pregnancy Discrimination Act
- Americans with Disabilities Act Genetic Information Nondisclosure Act
- Age Discrimination in Employment Act
- Genetic Information Nondisclosure Act
- Age Discrimination in Employment Act
- COBRA
- Medicare Secondary Payer (MSP) Rules Based on Age
- The Family and Medical Act (FMLA)
- California Family Rights Act (CFRA)
- The Shared Responsibility Provision of ACA
- New Parent Leave Act (NPLA)
Employee counts are used to determine what laws, rules, fees and penalties apply to employers, a health plan and/or the employer sponsor. The methods for counting employees are as varied as the laws that affect them. Counting employees can leave you feeling cross-eyed.
Here is a guide for counting employees for various laws and regulation size.
- Title VII of the Civil Rights Act, as amended by the Pregnancy Discrimination Act
- Americans with Disabilities Act
What employers does it affect? Employers with at least 15 employees
Who to count: Employees working 20 or more calendar weeks in the current or preceding calendar year.
How to count: Count each full-time and part-time employee as one.
- Genetic Information Nondisclosure Act
- Age Discrimination in Employment Act
What employers does it affect? Employers with at least 20 employees.
Who to count: Employees working 20 or more calendar weeks in the current of preceding calendar year.
How to Count: Count each full-time and part-time employee as one.
- COBRA
What employers does it affect? Employers with at least 20 employees.
Who to count: Employees (in all commonly-owned businesses) on more than 50 percent of the typical business days in the previous calendar year.
How to Count: Count each full-time employee as one. Count each part-time employee as a fraction, with the numerator equal to the number of hours worked by that employee and the denominator equal to the number of hours that must be worked on a typical business day in order to be covered full-time.
- Medicare Secondary Payer (MSP) Rules Based on Age
A group health plan is the primary payer and Medicare is the secondary payer for individuals age 65 or over if their group health coverage is by virtue of the individual’s (or his/her spouse’s) current employment status.
What employers does it affect? Employers with at least 20 employees
Who to count: Employees on each working day in at least 20 weeks in either the current or the preceding calendar year. The 20-employee test must be run at the time the individual receives the services for which Medicare benefits are claimed.
How to count: Count each full-time and part-time employee as one.
- The Family and Medical Act (FMLA)
FMLA requires employers that sponsor group health plans to provide group health plans benefits to employees on an FMLA leave. Please note that public agencies and public and private schools are covered regardless of the number of employees.
What employers does it affect? Employers with at least 50 employees
Who to count: Employees working 20 or more weeks in the current or preceding calendar year within a 75-mile radius of the applicable work location.
How to count: Count each full-time and part-time employee as one.
- California Family Rights Act (CFRA)
Starting in 2020, CFRA applies to employers with 20 or more employees within 75 miles of the applicable work location.
What employers does it affect? Employers with at least 20 employees
Who to count: Employees working 20 or more weeks in the current or preceding calendar year within a 75-mile radius of the applicable work location.
How to count: Count each full-time and part-time employee as one.
- The Shared Responsibility Provision of ACA
An Applicable Large Employers (ALE) must offer minimum essential coverage that is “affordable” and that provides “minimum value” to their full-time employees; must report to the IRS information about the healthcare coverage, if any, they offered to full-time employees; and must provide a statement to employees with notices called the 1095-C form.
What employers does it affect? Employers with at least 50 employees
Who to count: Full-time employees and full-time equivalent (FTE) employees in each month of the preceding year. Divide this number by 12, and if the result is 50 or greater, the employer is an ALE for the current year.
How to count: Count full-time (30 or more hours per week determined on a monthly basis) and FTE employees as one. Aggregate part-time hours and divide by 120 to determine FTEs.
- New Parent Leave Act (NPLA)
What employers does it affect? Employers with at least 20 employees
Who to count: Employees who have worked for an employer for at least 1,250 hours and at least 12 months.
How to count: Count each full-time and part-time employee as one.
I have reviewed employer responsibilities under the counting laws and not which employees are eligible. Employees may be eligible under these laws: COBRA, FMLA, CFRA and NPLA based on criteria set forth in each law. Employee counting for eligibility is another counting mess!
Barry S. Cohn is president and CEO of Really Great Employee Benefits, an employee benefits consulting firm headquartered in the San Fernando Valley; and CEO of JorgensenHR, headquartered in Santa Clarita. He serves on the board of directors of Valley Industry and Commerce Association and the Valley Economic Alliance. Barry holds a bachelor’s degree in economics from UCLA and an MBA from Pepperdine University.