Employees working 6 months at 40 hours per week then 6 months at 20 hours per week are fulltime employees average 30 hours per week temporary employees or employees working for a limited duration cannot automatically be considered seasonal or variable hour employees. Temporary employee benefit coverage encore benefits. Early evidence june 2016 marcus dillender carolyn heinrich susan houseman upjohn institute vanderbilt university upjohn institute abstract the affordable care act aca requires employers with at least 50 fulltimeequivalent employees to offer affordable health insurance to. Temporary employee benefit coverage under the affordable care act.
Clackamas county affordable care act employer shared. Temporary employees referred to as shortterm employees under the aca are those employees hired into a position that is less than 12 months. Under the aca seasonal employees, who work 120 days or less during a year, are not counted as employees for determining whether a company is a large 50 employees or more on average or a small employer under 50 employees on average. The aca requires applicable large employers ales to. The aca and seasonal employees can be a difficult road to navigate to remain compliant. The seasonal limitation of 6 months of employment is generally accepted. That way, each employee will know what to expect when you hire them to work and where to look for answers to common questions. Below are several examples of employees that are, and are not, seasonal employees under the aca definition 1. All examples assume the employee is expected to work more than 30 hours per week. There was a time when it may not have been important to you whether employees hired only for a specified term were called temps or seasonal, but the affordable care act aca has changed that. A seasonal worker is an employee that has worked no more than 120 days or four months during the prior year. How will the aca impact your temporary and contract workers. Some workers are hired on a shortterm temporary basis, while others are hired for longerterm projects or even indefinitely. A temporary employee is usually hired to cover the absence of a permanent employee on a temporary basis.
If you ever employ temporary or seasonal employees, or you wonder whether your employees are temporary, here are the basics you should know. Since the employer mandate provisions of the affordable care act aca. Under the aca, employers are given the freedom to make a goodfaith interpretation for classifying the people among their workforce who fall within the seasonal employee category, and there are many types of temporary worker groups that may be classified as such. See tip 3 for the definition of parttime, variable and seasonal new hires. The affordable care act complicates the use of temporary. Effects of the affordable care act on parttime employment. Here seasonal employees are distinguished from seasonal workers. Temporary employees referred to as shortterm employees under the aca are those employees hired into a position that is less than 12 months in length. Fulltime temporary employees when are they eligible. This summer, many of you will be adding temporary employees to assist with your.
Recurring work that lasts less than 6 months each year is normally best performed by temporary employees. However, employers can generally determine the duration of a temporary work appointment. First and foremost, there are two types of seasonal seasonal workers and seasonal employees that the irs addresses in very different contexts. Businesses often need to hire workers on a seasonal or parttime basis. Seasonal employees under the aca follow the department of labor definition, meaning that they generally begin work at the same time every year and their employment is seasonal in nature. For instance, should these employees be counted in determining whether an employer is large enough to be subject to the. Under the aca, seasonal employees include those who generally begin work at the same time of year and their employment is no longer than 6 months. Aca compliance includes monitoring your seasonal employees and workers during the summer. Why your summer interns are probably not seasonal employees under ppaca and must be offered benefits by the 90th day first off, the terms seasonal worker and seasonal employee are both used in the employer shared responsibility provisions of ppaca but in two different contexts with two different meanings.
This worker category is used in the ales calculation as to whether or not the company is a large employer and subject to large employer rules under the aca. Clarifying misunderstood terms seasonal workers and. The difference between temporary employees and seasonal. Nonetheless, properly categorized new variable hour, seasonal. Without question, the aca is the most complex employment law when it comes to the rules for counting employees, and also for determining which employees are considered fulltime employees and thus. Applicable large employers ales the aca s employer mandate requires ales to offer coverage to all ft common law employees. Part time or seasonal help internal revenue service. Examples include summer lifeguards and retail employees during the busy holiday months. The aca, however, gives leeway to companies that hire seasonal. Part of the confusion is being generated from two terms with distinct meanings under the affordable care act aca. An occasional worker, temporary employee, or seasonal temporary title is appropriate when an appointment is not classified as a student, staff, or academic title. That is, it does not matter what the agreement between the temporary agency and your organization spells out. If a company hires seasonal employees throughout the year, some may be new and some may be rehired multiple times for different positions, how does the aca module handle multiple rehires. A full time employee under aca law is one who provides at least 30 hours of service per week, or hours of service per month, for the employer.
In this tip, well discuss how to report parttime, variable and seasonal new hires. As a result, seasonal employment is appropriate when the work is expected to last at least 6 months during a calendar year. This is one of four questions addresed about seasonal employees. How many hours can seasonal employees work before needing. Workers not familiar with this sort of employment, and employers unaccustomed to hiring parttime andor seasonal employees, may not be fully aware of the regulations surrounding such employment. The reality is that the summer is a very critical time for the health of your aca compliance, largely due to the high volume of seasonal workers and employees that many businesses process during the. Seasonal employees and the affordable care act aca many employers rely on seasonal employees. Employees exempt from the paid sick leave law include. The aca requires applicable large employers ales to offer health insurance to their fulltime 30plus hours per week employees. Health insurance requirements for employers with interns. Likewise, nonemployees such as 1099sindependent contractors are not employees under the aca definition and require no offer of coverage. If your organization exercises sufficient control over the temp or contractor employee, it will be deemed the commonlaw employer of that employee. The irs has confirmed that there is not an exemption under the irc section 4980h penalties for temporary, shortterm employees unless the employee meets all of the seasonal employee requirements as outlined above.
Temporary employees, who work through an agency may have paid benefits such as health care insurance. Laws concerning employee treatment, benefits, and policies of parttime, temporary, or seasonal employees are covered by both federal and state laws. Whether you are getting paid or paying someone else, questions often arise over the tax treatment of payments for parttime and seasonal help. For 2015, under special transitional rules, an employer is considered a large employer if it employed an average of 100 or more employees, including fulltime equivalents during 2014. Facts you offer health coverage to your affordable care act fulltime aca ft employees, their spouse and children. Seasonal employees are classified like other employee in regards to rules governing when they are coded as a rehire.
Temporary and parttime employment spikes as retailers and other businesses increase staffing to accommodate their seasonal increase in business. To learn more about employee rights, benefits and policies as they may apply to your specific case, check your states employment laws. Examples of those who do not qualify as seasonal employees include. How will aca impact your temporary and contract workers. Department of labor dol defines a temporary work appointment as one that lasts one year or less and has a specific end date. Kb14088 employees should be eligible for coverage after a fulltime waiting period, not to exceed 90 days. Temporary employment policies have been updated to remain in compliance with the federal affordable care act aca. How does the affordable care act aca apply to these seasonal employees that many employers have retained from year to year.
A nonpostal employee working on a temporary appointment an appointment limited to one year or less, a nonpostal employee working on a seasonal schedule of less than 6 months in a year, or a nonpostal employee working on an intermittent schedule, where the employing office expects the total hours in pay status including overtime hours plus qualifying leave without pay hours to be at. The first thing we want you to know is how prepared the staffing industry is for the changes required by the affordable care act aca. The look back measurement method parttime, variable. Seasonal workers seasonal workers, in irs terms, are used by the tax agency to determine whether or not an organization is an ale. When it comes to the aca and seasonal employees, the irs.
For information on the protections related to your employmentbased health plan or if you are looking for coverage, please visit our page for workers and families. Temporary employees when to offer employee health benefits. How to schedule and pay seasonal or temporary employees. Keep tabs on seasonal workers and employees to avoid aca. The determination of which employees are seasonal employees has taken on new importance for applicable large employers ales because the affordable care act aca measurement method rules allow employers to treat fulltime seasonal employees differently from fulltime nonseasonal employees, for purposes of group health plan eligibility. This may be due to a leave of absence for maternity or perhaps a disability on the part of the permanent employee. Regardless of whether you hire parttime seasonal employees, fulltime seasonal employees, or a combination of both, be sure to list all of the applicable aca information in your employee handbook. For example, if an employee works only for the months of january, july, and october, then the employee is seasonal since that is less than 120 days. The affordable care act prohibits employers from retaliating against employees who report violations of the acts health insurance reforms, found in title i of the affordable care act. The aca defines seasonal employee as an employee who is hired into a position for which the customary annual employment is six months or less and for which the period of employment begins each calendar year in approximately the same part of the year, such as summer or winter. Part time, temporary, and seasonal employees findlaw. Your organization is an ale if you have 50 or more fulltime equivalent fte employees. The aca requires applicable large employers ales who had 50 or more fulltime equivalent employees ftees in the prior year to offer affordable, minimum value health coverage to their fulltime employees or pay a penalty.
According to the definitions contained in the affordable care act aca. If a seasonal employee is working fulltime, the employee may be eligible for healthcare coverage since eligibility is determined by hours worked. Temporary employees are often hired through a temporary staffing agency. Under ppaca, a seasonal employee is one who works 120 days a year or less for the employer. Seasonal employment may not be used as a substitute for fulltime employment or as a buffer for the fulltime workforce. For example, some businesses may need seasonal help for sporting events, holidays, and commercial fishing or harvest seasons. All employees who work at least 30 days for the same employer within a year in california, including parttime, per diem, and temporary employees, are covered by this new law with some specific exceptions. If you hire summer interns at the same time each year, it is a good sign they. Handling seasonal employees and workers is critical for aca. Temporary employees are hired by employers to help meet business. The affordable care act and seasonal employees anthem. Thought leadership from cbiz professionals provides you with important insights and resources you need to find success for your business.
The great news is regardless of whether a new employee is a parttime employee, a variable hour employee, or a seasonal employee, the employee will be placed into an initial measurement period. In part two of this series we discuss the rules for new employees classified as a parttime employee, a variable hour employees, or a seasonal employee. Seasonal employees working fewer than 120 days per year are excluded from calculations of whether an employer is an aca covered large employer. Are seasonal workers entitled to health care coverage. Under the aca, large employers must offer health care coverage to substantially all fulltime employees and their children. Many employers hire temporary and contract workers from staffing agencies. Because unpaid interns and unpaid temporary workers have no paid hours or hours entitled to payment, they are not fulltime employees under the aca and require no offer of coverage. Fulltime, variable hour and seasonal employees fact sheet.