The Employer Shared Responsibility Provision and Seasonal Workers

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Licensed for 14 years

Attorney in Austin, TX

Jake Posey

Serving Austin, TX

The reporting requirements for the Affordable Care Act will remain in effect for the 2017 reporting period, which covers 2016. Any legislative actions regarding repeal of the ACA will have a delay in full implementation. For now, the reporting requirements remain in place and the IRS and Treasury Department have published some guidelines about how to determine your number of full-time employees if you use temporary seasonal workers.

The Employer Shared Responsibility Provision details who is an “Applicable Large Employer” for purposes of the requirement to provide health insurance coverage. An applicable large employer (ALE) has over 50 full-time employees.
The IRS gives some definitions:
• A full-time employee is one who works 30 hours a week or more.
• Two part-time employees equals one full-time for the purposes of this provision.
• Hours worked should be averaged. If an employee is hired as part-time, but hours worked over the course of a year average 30/week, that person will count as a full-time employee.

A business can use seasonal workers and part-time employees without becoming an ALE if the number of employees over the 50 full-time limit is for under 120 days in a calendar year. So if seasonal workers are hired for harvest season or the holiday season, and their numbers bring the totals to over 50 for less than 120 days in the course of the year, a business is not an applicable large employer.
• A part-time employee and a seasonal worker are different categories of employment.
• An employer can use reasonable, good-faith interpretation of seasonal workers vs part-time employees.
• One reasonable interpretation is that a part-time employee works regularly, under 15 hours a week on average, but has the expectation of continuing to work as an employee.

Attorney Jake Posey and the team at The Posey Law Firm strive to assist clients in all avenues of Business law and formation. Consider speaking with The Posey Law Firm, PC regarding your company’s business formation and business law needs.

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