Last updated on January 15th, 2019 at 11:41 am
Independent grocers are all too familiar with the challenges they face on a daily basis regarding the rapidly evolving supermarket industry, including competition from conventional grocery giants, changing technology, and managing cash flows amidst food deflation and increased labor costs. In addition to the daily duties of managing their business, they also have to stay up to date with federal and state laws, which can be overwhelming.
HR questions and issues that drain vital resources
As we close out another year, I thought we would answer two of the most frequent questions from independent grocers. These questions primarily relate to whether they have to comply with certain laws. The most common of these are:
1. The Family Medical Leave Act (FMLA)
FMLA is a federal law that provides employees unpaid leave, job protection and health insurance protection, provided they meet the qualifying reasons for these benefits. Reasons for leave include birth of child; adoption or foster care; medical care for self, spouse, child or parent; qualifying exigency because of covered active duty or impending call to active duty; and care for injured/ill service member or veterans within five years of leaving service.
Who must comply with FMLA
FMLA applies to all public-sector employers, but only certain private-sector employers. Private-sector employers who have 50 or more employees for 20 or more work weeks during the current or preceding calendar year must comply with FMLA.
This calculation regarding the 50-employee threshold is confusing and must include all employees—including full-time, part-time, temporary, seasonal—from all commonly owned entities, working in the U.S. or any U.S.-owned territories.
If an employer meets these criteria, it is very important they comply with the law by providing the proper notices, job protection and other requirements. The risk of not complying with the law can be significant. Employees who are not provided their rights under FMLA can be entitled to back wages, salary, benefits and liquidated damages as a result of an employer’s negligence.
2. The Affordable Care Act (ACA)
The ACA was enacted in March 2010 to make affordable health insurance available to more people. The law provides consumers with tax credits that lower insurance costs for lower-income individuals. The ACA also expanded Medicaid programs in some states.
Who must comply with ACA
Employers are required to offer health insurance and perform ACA reporting if they qualify as an Applicable Large Employer (ALE), meaning they have an average of at least 50 full-time equivalents in the prior year. Full-time equivalents include those that are deemed full-time (i.e. work at least 30 hours per week) and also converting non-full-time employees to “full time equivalents.” The calculation can be very complex, especially when considering common ownership of entities. Therefore, we suggest you contact an expert in ACA to assist you with the calculation.
The ACA is very complex. If you believe you are close to the requirements outlined above, we suggest that you perform the calculation to determine if you are an ALE. The financial risk for non-compliance could jeopardize your entire business. If you don’t offer Minimum Essential Coverage to at least 95 percent of eligible employees, Penalty A goes into effect at $2,320 (for 2018) per full-time employee. If you don’t offer affordable coverage that provides a minimum value, Penalty B goes into effect at $3,480 (for 2018) per full-time employee that goes to the Insurance Exchange.
The paperwork, research and time that grocers must spend in order to maintain compliance with these laws is time-consuming and frustrating, and the chances of making serious mistakes are very high. We continue to advise our clients on how important it is to comply, before it’s too late.
Chris Cooley is co-founder of MyHRConcierge and SMB Benefits Advisors. Grocers and other employers rely on him for HR compliance and administration, contesting SUI claims, ACA compliance, COBRACompli, employee handbooks, workforce management and benefits advisory solutions. Cooley’s companies specialize in helping small to mid-sized grocers throughout the U.S. Chris can be reached at 855-538-6947, ext. 108 or at [email protected].