From 25 to 100 Employees: The HR Systems You Need to Stay Compliant

Moving from 25 employees to 100 is a tipping point for many businesses. What worked with a lean, close-knit team often becomes unwieldy as headcount rises, regulatory obligations multiply, and day-to-day HR tasks get more complex. This post outlines the critical HR systems your organization needs to stay compliant, organized, and positioned for sustainable growth as you surpass this major staffing milestone. 

We’ll examine essential technologies, processes, and policies that help medium-sized businesses handle everything from recruitment and onboarding to benefits administration and record-keeping—while maintaining compliance with federal, state, and (if applicable) international regulations. 

 Why 25 to 100 Employees Is a Critical Growth Stage 

Increasing Regulatory Complexity
In the United States, key federal labor laws—like the Family and Medical Leave Act (FMLA)—begin to apply or carry greater weight around certain employee thresholds. For instance, FMLA typically applies to businesses with 50 or more employees. Meanwhile, the Affordable Care Act (ACA) requires employers with 50 or more full-time equivalent employees to offer health coverage or face penalties. The jump from 25 to 100 employees crosses important compliance milestones that can’t be overlooked. 

(Source: DOL.gov) 

New HR Demands
Your HR department (or HR lead, if it’s just one person) will find that processes requiring manual oversight—like payroll changes, performance reviews, or benefits administration—grow exponentially in workload. Without streamlined systems, your team may become overwhelmed by daily firefighting, making it harder to focus on strategy or people development. 

 Core HR Systems and Software 

HRIS (Human Resources Information System)
An HRIS centralizes employee data, automates routine tasks (such as PTO tracking and timesheet approvals), and ensures you have easy access to critical information. When evaluating an HRIS, consider: 

• Scalability: Will it support 100+ employees without slowing down? 

• Integration: Does it sync with payroll, benefits, and performance management tools? 

• Security and Compliance: Does it offer audit trails and secure data storage? 

Payroll and Benefits Administration
While some HRIS solutions include payroll and benefits modules, you might opt for specialized systems that handle multi-state taxation, garnishments, and more advanced functionalities. Compliance with wage-and-hour laws (like the Fair Labor Standards Act) becomes more complex as your workforce grows and potentially spans multiple states. A robust payroll system ensures accuracy and reduces the risk of costly errors. 

Performance Management Platforms
Moving beyond 25 employees often means formalizing performance reviews, goal-setting, and career pathing. Tools that facilitate continuous feedback, 360-degree reviews, and objective setting can foster a transparent culture of growth and accountability. 

 Compliance Must-Haves as You Scale 

Onboarding Workflows and Recordkeeping
Electronic onboarding forms and workflows help you document that new hires have completed necessary paperwork (I-9 forms, W-4 forms, direct deposit details, etc.). Proper recordkeeping is not just about convenience: The Immigration Reform and Control Act requires valid I-9 forms for each employee, and non-compliance can result in substantial penalties. 

(Source: USCIS.gov) 

EEO (Equal Employment Opportunity) and Affirmative Action Requirements
Companies that surpass 50 or 100 employees (depending on government contracts or other conditions) may need to file EEO-1 reports or implement Affirmative Action Plans. An integrated HR system that categorizes employees by role, pay band, and demographics can help ensure you meet reporting obligations. 

FMLA, ACA, and Other Federal Mandates
As noted, hitting 50 employees triggers FMLA coverage. At 50+ full-time equivalents, you must comply with the ACA’s shared responsibility provisions—often called the “employer mandate.” Some states also impose additional leaves, like paid family leave or paid sick leave, once you hit certain thresholds. Have a tracking system that flags eligibility and hours worked to ensure compliance. 

 Multi-State and Remote Workforce Considerations 

Varying State Laws
When you had fewer than 25 employees, maybe you operated out of a single office. But as you expand to 50, 75, or 100 employees, you might hire remote staff in multiple states. Each jurisdiction has unique rules on paid leave, unemployment insurance, and tax withholdings. Automating location-based compliance in your HR and payroll systems is critical. 

Work Eligibility Verification
Remote hires must still comply with I-9 verification rules. The Department of Homeland Security has pilot programs for remote I-9 verification, but the details can be tricky. Your system should guide staff on correct procedures for verifying eligibility, especially if they’re far from headquarters. 

Data Security and Privacy
A more dispersed workforce means more endpoints accessing HR systems. You must ensure robust cybersecurity measures to protect sensitive employee information. This includes multi-factor authentication, data encryption, and strict user-permission protocols. 

 Key HR Policies to Solidify 

Employee Handbook
Document your policies on leave, harassment, code of conduct, data privacy, and more. As your team grows, an up-to-date handbook (with version control) ensures everyone gets consistent information. Also consider disclaimers that policies can change to meet evolving needs. 

Pay Equity and Compensation Structures
With more employees, pay inequities become both more likely and more visible if left unaddressed. A structured compensation framework helps you stay competitive, transparent, and legally compliant under regulations like the Equal Pay Act. Regular compensation audits can pinpoint imbalances before they become legal risks. 

(Source: EEOC.gov) 

Harassment and Anti-Discrimination Training
Many states, including California and New York, mandate harassment training at certain employee counts. Provide interactive training modules and maintain proof of completion in your HR system. 

Building an Effective Recruiting Process 

Applicant Tracking Systems (ATS)
Once you’re hiring at volume, an ATS can automate job postings, application screening, and interview scheduling. Beyond saving time, it supports compliance by tracking candidate demographics and ensuring consistent hiring practices. 

Structured Interviews
To mitigate the risk of discrimination and inconsistent evaluations, use standardized interview questions linked to the core competencies required for the role. This is especially important when multiple managers interview the same candidate. 

Onboarding Experience
A robust onboarding process that integrates new hires into your company culture can reduce turnover. Systems that automate tasks like device requests, benefits enrollment, and org chart introductions free up HR to focus on engagement rather than paperwork. 

The Role of Outsourcing and Specialized Support 

Why Medium-Sized Businesses Outsource HR
According to the Society for Human Resource Management (SHRM), many mid-market organizations outsource parts of HR—like payroll, benefits, or compliance audits—to free internal teams for strategic tasks. This also mitigates risk since specialized firms stay on top of evolving regulations. 

(Source: SHRM.org) 

Selecting the Right Partner
When evaluating outsourced HR or Professional Employer Organization (PEO) solutions, look for: 

• Industry Expertise: Familiarity with your specific sector. 

• Scalability: The ability to handle your next growth phase. 

• Technology Integrations: Seamless data exchange with your existing tools. 

Escalon’s Comprehensive HR and Compliance Support
Escalon Services offers end-to-end HR solutions designed for growing businesses. From setting up robust onboarding workflows to managing payroll in multiple states, Escalon helps organizations move from 25 employees to 100 without drowning in administrative complexity or risking compliance pitfalls. 

Fostering a Healthy Company Culture During Rapid Growth 

Consistent Communication
HR processes often define how employees experience a company’s culture—from receiving feedback to celebrating milestones. As you expand, ensure communication remains personal and transparent. 

Employee Engagement Tools
Pulse surveys, recognition platforms, and ongoing learning and development programs can keep staff connected to your mission—even as headcount doubles or triples. 

Leadership’s Role
Executives and mid-level managers are “culture carriers.” Train them on legal compliance, yes, but also on how to mentor and lead teams in line with your core values. 

Measuring ROI on HR Systems 

Reduced Turnover and Improved Retention
When HR systems are streamlined, employees receive accurate paychecks, have clarity on benefits, and feel supported. This leads to higher retention, saving you recruitment and training costs. 

Compliance-Related Cost Avoidance
Automating compliance tasks and documentation helps you avoid fines, back wages, or litigation. Track metrics like the number of compliance incidents or payroll errors before and after implementation of a new system. 

Scalability for Future Growth
Perhaps you plan to grow to 200 or 500 employees eventually. Investing in the right HR infrastructure now lays the groundwork, so you won’t have to overhaul your systems again in a year or two. 

Growing from 25 to 100 employees is both exciting and daunting. With more staff comes more responsibility—particularly on the HR and compliance fronts. Implementing the right systems and processes early not only reduces risk but also helps sustain a positive work environment that fuels further expansion. 

From a scalable HRIS to precise payroll management and robust compliance tracking, each piece of the HR tech stack is crucial. As you make these investments, remember that you’re not just ticking boxes; you’re creating a stable platform where your employees can thrive and your company can flourish. 

How Escalon Can Help
By partnering with Escalon Services, you gain access to a comprehensive suite of HR, accounting, and compliance solutions tailored for medium-sized businesses in rapid growth phases. Whether you need help implementing a new HRIS or navigating multi-state payroll complexities, Escalon’s expert team offers the guidance and tools you need to move confidently from 25 employees to 100 and beyond.