What constitutes a full-time employee?

Most employers are familiar with the controversial PPACA that passed recently. Starting in 2014, employers with 50 or more full-time employees will be required to provide the minimum necessary health care coverage for their full-time employees or pay a penalty. But what constitutes a full-time employee?

The statute currently states that any employee with 30 or more hours a week in any given month would be considered an employee. But then what about seasonal employees or employees who have different hours every week?

The IRS provides documentation (IRS Notice 2012-58) which describes safe harbor methods that employers may use (but are not required to use) to determine which employees are treated as full-time employees for purposes of the shared employer responsibility provisions of § 4980H of the Internal Revenue Code (Code). A link to the IRS Notice 2012-58 can be found here.

This document provides ideas and examples of ways employers may determine what classifies full-time employees. Here is an example given from IRS Notice 2012-58:

For new variable hour employees, Employer B uses a 12-month initial measurement period that begins on the first day of the first month following the start date and applies an administrative period that runs from the end of the initial measurement period through the end of the second calendar month beginning on or after the end of the initial measurement period. Employer B hires Employee Y on May 10, 2014. Employee Y’s initial measurement period runs from June 1, 2014, through May 31, 2015. Employee Y works an average of 30 hours per week during this initial measurement period. Employer B offers coverage to Employee Y for a stability period that runs from August 1, 2015 through July 31, 2016.

If you are concerned about meeting these requirements for full-time employees, please call The Employee Management Team to receive assistance in all branches of human resources.