Headcount Reporting: Why You Must Do It

A headcount is the total number of people employed by an organization, including full-time and part-time employees.

A headcount report, created via a human resource information system (HRIS), lets you sort and categorize employees based on different variables — e.g., active or inactive, full-time or part-time, exempt versus nonexempt, age, race, salary and so on. These reports play an integral role in compliance.

The Magic Number 50 
Once your headcount passes 50, your business's reporting and compliance requirements soar to another legal and regulatory level.

The Affordable Care Act (ACA) says that employers with more than 50 full-time employees must offer health insurance — or pay a penalty. "Full-time" refers to anyone who works a minimum of 30 hours per week or 130 hours per month for the company.

The Family Medical Leave Act (FMLA) requires private employers with 50 or more employees to provide unpaid, job-protected family and medical leave to eligible employees. Public and private schools must offer FMLA, regardless of their headcount.

State and local employment laws are imposed on businesses according to varying criteria, one of which may be the company's size. For instance, employers with 50 or more employees in California must comply with the state's Family Rights Act and provide sexual harassment training every two years.

50 Isn't the Only Magic Number
The Equal Employment Opportunity Commission (EEOC) requires private employers with 100 or more employees to perform demographic reporting via annual EEO-1 reports — which must categorize employment data by job category, race/ethnicity and gender.

The Employee Retirement Income Security Act (ERISA) says that welfare benefit plans with 100 or more participants must file Form 5500 annually. Plans with fewer than 100 participants may be able to file using the short version of the form, known as Form 5500-SF.

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If you want to know your headcount — that is, how many people are employed by your organization — simply tally your number of employees, whether full-time, temporary, seasonal or part-time.

However, headcount reporting is a more complicated process because it's driven by a specific purpose. A headcount report for ACA purposes will differ from a headcount report for FMLA purposes because whereas the employee must have worked at least 1,250 hours in the last 12 months to qualify for FMLA, the hours for ACA eligibility are totally different.

Headcount reports can be used in other capacities, outside of compliance — including to evaluate salaries and wages in order to determine pay increases and to figure the number of employees by department or location in order to assess staffing needs.

Depending on the purpose of the report, you may need to include nonemployees. For example, many employee relations laws (for example, those concerning sexual harassment) apply not just to employees but also to nonemployees. In these scenarios, the term "workforce headcount" instead of "employee headcount" would be more fitting.
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Let us know how we can help you get a handle on your headcount.