Key Takeaways

  • The ADA applies to employers with 15 or more employees for at least 20 weeks in the current or previous year.
  • Counting employees includes full-time and part-time workers, but generally not independent contractors.
  • Shareholder-owners may or may not count as employees depending on their role in corporate management (per Clackamas case).
  • State laws may apply stricter standards, sometimes covering smaller employers.
  • The ADA requires reasonable accommodations in hiring, employment, leave, and return-to-work situations.
  • Small businesses not covered by the ADA may still have responsibilities under state/local disability laws.
  • The EEOC offers guidance to ensure equal access for applicants and employees during applications, interviews, and job duties.

ADA Number of Employees

According to the Civil Rights Act of 1866 (race and color discrimination), everyone in the jurisdiction of the United States has the same rights in each state and territory to make and enforce contracts.

Civil Rights Act of 1866 applies to all contracts made within the jurisdiction of the United States, including contracts for personal services, and thus applies even to independent contractors.

This Civil Rights Act does not specify a minimum number of employees or contractors to be involved or to apply, so if there is one worker of any kind, then the employer is liable under this statute.

In the Employee Retirement Income and Security Act (ERISA), they define employer as “any person acting directly as an employer, or indirectly in the interest of an employer, in relation to an employee benefit plan."

Additionally, the term “employee” means “any individual employed by an employer.”

Under ERISA, the retirement benefit rights apply to any employee who works at least 1,000 hours in a 12-month period.

In the Fair Labor Standards Act (FLSA), the broad definition of an employer includes managers and anyone else directly involved with pay decisions, since they act "in the interest of an employer" toward the employees under their charge

There is a test called the common law test that determines employment status in FLSA cases. This is also called the economic realities test. Occupational Safety and Health Act (OSHA) says that employer means a person who is doing business that affects commerce and who has employees. This person, however, but does not include the United States (except the United States Postal Service) or any State or political subdivision of a State. The common law test is used to determine the employment status in FLSA cases, and this is applicable to OSHA as well.

Under the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), "each employer" must report "each newly-hired employee" to the state directory of new hires, and PRWORA and the State Directory of New Hires and the new hire reporting laws have the same basic definitions: 

  • In the IRS code of 1986, the term 'employer' means, in section 3401(d), that it is any labor organization and any governmental entity. In that same code, the term 'employee' means “an individual who is an employee within the meaning of Chapter 24 of the Internal Revenue Code of 1986." According to the IRS, a worker’s employment status applies.

When it comes to the Federal Unemployment Tax Act (FUTA), 'employer' is in any calendar year a person who made $1,500 or more in wages. If the employer is a domestic service, then their employee is liable if they are paid $1,000 or more in any one quarter of the year. The term employee also means a corporation’s officer or any individual who is an employee.

When it comes to the Immigration Reform and Control Act of 1986 (IRCA), any restrictions on citizenship and national origin discrimination are not applicable to "a person or other entity that employs three or fewer employees."

However, this provision in the IRCA does apply to employers with four or more employees.

They don’t distinguish between full- and part-time employees, and there is no difference made based upon how long an employee has worked for the company. Restrictions on hiring unauthorized aliens is applicable to contracts for labor. Therefore, laws preventing employment of unauthorized aliens applies to independent contractors as well.

Independent contractors mean persons or companies who work independently in business and they contract our work per to their preferred ways of doing work. Additionally, they are required to submit to control only as it applies to their results.

The Americans with Disabilities Act (ADA), protects employees from discrimination based on their disability.

Further, to protect people from age discrimination, the Age Discrimination in Employment Act (ADEA) was created. The Worker Adjustment and Retraining Notification Act also helps employees, so they are notified in advance of when a plant will close and if there will be mass layoffs. In this instance, 'employer' means “any business enterprise that employs 100 or more employees, excluding part-time employees."

When there are 100 or more employees that contribute collectively to at least 4,000 hours per week, exclusive of overtime hours, this law applies to them.

How Employees Are Counted Under the ADA

When determining whether the ADA applies, employers must count all employees on the payroll during each workday, including part-time workers. The Equal Employment Opportunity Commission (EEOC) has clarified that “employee” means anyone employed by the business, regardless of hours worked, and the 15-employee threshold must be met for at least 20 weeks in the same calendar year. Independent contractors are typically excluded, but temporary workers hired through staffing agencies may be counted if the business controls their work conditions.

Texas Statutes

In Texas, under the State Directory of New Hires of the Texas law, all employers must report “each newly-hired or rehired employee" to the state.

Texas Payday Law says that an individual who performs directly or indirectly for the interests of an employer is an employee and must be paid. The Texas Unemployment Compensation Act (TUCA) says that with domestic service employees their wage liability amount is $1,000 paid in a calendar quarter.

An "Employing unit" is defined in Texas as being the person who “has employed an individual to perform services for the person in this state.” A Small Employer Health Insurance Availability Act is considered to be a law to support the continuation of health benefits for six months after employment ends.

A small employer is a person who has employed an average of at least two employees, but not more than 50.

Does your business have to comply with ADA?

If you have 15 plus employees for each working day for 20 calendar weeks in a year, then those companies will have some relief. Specifically, the United States Supreme Court said that when there are shareholders for small professional corporations that are also employees, they may be called that for the purposes of the application of the ADA.

In Clackamas Gastroenterology Associates v. Wells, Deborah Ann Wells sued her employer, who was a small medical practice doctor. She claimed that they discriminated against her for her disability because they failed to accommodate her disability and they terminated her employment.

The practice said in Clackamas Gastroenterology Associates v. Wells that they were not required to accommodate her because it simply did not have the requisite number of employees for 20 weeks of a year. They had 15 employees for only 10 weeks of the prior year, and eight weeks of the present year.

When they totaled the employees, though, the practice did not include the four doctors who were also shareholders of the corporation.

"Should small business owners be counted as employees?" was asked by the Supreme Court in that case, and they eventually had to address this issue.

This case showed that shareholders-owners who operate independent and manage their business, they are proprietors and not employees; if they are subject to the control of the corporation, they are employees.

This court said that employers “can hire and fire employees, can assign tasks to employees and supervise their performance, and can decide how the profits and losses of the business are to be distributed.”

Also, they stated that an employer “can hire and fire employees, can assign tasks to employees and supervise their performance.”

If you have the applicable number of employees at your company, then you need to know the ADA requirements so that you can help disabled employees and comply with the law.

State Laws and Smaller Employers

Even if your business falls below the ADA’s 15-employee threshold, state or local laws may impose disability discrimination requirements. For example, some states extend protections to businesses with as few as one employee. Employers should carefully review state human rights statutes to ensure compliance beyond federal ADA obligations.

Reasonable Accommodation for Employees on Leave and Former Employees

The Job Accommodation Network (JAN) is a free service from the U.S. Department of Labor's Office of Disability Employment Policy. Consultants at JAN provide job accommodation information to employers and have since 1983, when JAN was founded. They have also helped employers in the Americans with Disabilities Act (ADA) since 1992 when the ADA went into effect.

The Employers' Practical Guide to Reasonable Accommodation under the Americans with Disabilities Act is a summary of some of the most frequent issues that employers have regarding accommodations. Also, complying with ADA and JAN's practical ideas for resolving them are also included.

Employer Obligations for Small Businesses

Small employers often assume they are exempt from disability accommodation rules. While the ADA does not cover businesses with fewer than 15 employees, the EEOC emphasizes that small employers may still benefit from voluntarily providing accommodations to retain valuable employees. These adjustments, such as flexible scheduling or ergonomic equipment, are often inexpensive and help improve workplace productivity and morale.

ADA Basics

The ADA was passed in 1990 and was in effect in 1992 ad is a federal civil rights law. The ADA was designed to protect people with disabilities from discrimination in employment. The activities offered by state and local governments is offered in certain places.

The ADA restricts discrimination in employment and forces employers to give reasonable accommodations for disabled applicants and employees. Only "covered entities" must comply with Title I of the ADA. The term “covered entities” means employers with 15 or more employees, employment agencies, labor organizations, and joint labor-management committees. All entities will be called employers. Title I protects "qualified individuals with disabilities.”

An individual is qualified if they satisfy the skill, experience, education, and other job-related requirements of the position sought or held, and “can perform the primary job tasks of the position, with or without reasonable accommodation.”

Disability means that “(1) a physical or mental impairment that substantially limits one or more major life activities, (2) a record of a physical or mental impairment that substantially limited one or more major life activities, and (3) being regarded as having such an impairment.”

An accommodation is considered reasonable when it modifies or adjusts a job, work area, or how processes are done that allows a qualified disabled individual to enjoy an equal employment opportunity.

An equal employment opportunity is the opportunity to have an equal performance level or to enjoy equal benefits and privileges of employment as are available to an average similarly situated employee without a disability.

Enforcement and Employee Rights

Employees who believe their rights under the ADA have been violated can file a complaint with the Equal Employment Opportunity Commission (EEOC). The EEOC investigates claims and may attempt mediation before pursuing litigation. Remedies can include reinstatement, back pay, and policy changes within the organization. Importantly, the ADA prohibits retaliation against workers who request accommodations or file complaints.

Reasonable Accommodations for Applications and Job Interviews

All aspects of employment, including advertisements, applications, interviews, etc. are covered by the ADA. Many ADA rules that apply to applicants and new-hires are the same as the rules for employees, but there are still some differences.

No specific information about the ADA is required on job advertisements or job applications.

The EEOC advises employers to include information about the essential functions of the job in job announcements, advertisements, and other recruitment notices because specific information about essential functions will attract applicants, including individuals with disabilities, who have appropriate qualifications.

The EEOC also tells employers that they need to include a statement of compliance with the EEOC in job advertisements and notices, saying that they do not discriminate on the basis of disability or other legally prohibited bases.

Practical Examples of Accommodations

Examples of reasonable accommodations under the ADA include:

  • Providing sign language interpreters during interviews.
  • Modifying job applications to be accessible for screen readers.
  • Allowing flexible schedules for employees with medical treatment needs.
  • Adjusting workspaces to allow mobility device access.
  • Reassigning non-essential job tasks when necessary.

These adjustments must be reasonable and not cause an undue hardship for the employer, which means significant difficulty or expense considering the employer’s size and resources.

Frequently Asked Questions

  1. What is the minimum number of employees for ADA compliance?
    The ADA applies to employers with 15 or more employees for at least 20 weeks in a calendar year.
  2. Are part-time employees counted toward the ADA threshold?
    Yes. Both full-time and part-time employees are counted, but independent contractors typically are not.
  3. Do state laws ever cover businesses with fewer than 15 employees?
    Yes. Many states have disability laws that apply to smaller employers, sometimes even those with just one employee.
  4. What happens if an employer fails to provide reasonable accommodations?
    Employees may file a charge with the EEOC, which can result in mediation, settlements, or legal action against the employer.
  5. What are examples of reasonable accommodations under the ADA?
    Examples include modified work schedules, assistive technology, accessible facilities, and job restructuring to remove non-essential functions.

If you need help with any issues surrounding ADA, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.