It
seems like a simple question: How many full-time workers does your business
employ? But, when it comes to the Affordable Care Act (ACA), the answer can be
complicated.
The
number of workers you employ determines whether your organization is an
applicable large employer (ALE). Just because your business isn’t an ALE one
year doesn’t mean it won’t be the next year.
50
is the magic number
Your
business is an ALE if you had an average of 50 or more full time employees —
including full-time equivalent employees — during the prior calendar year.
Therefore, you’ll count the number of full time employees you have during 2016
to determine if you’re an ALE for 2017.
Under
the law, an ALE:
- Is subject to the employer shared responsibility provisions with their potential penalties, and
- Must comply with certain information reporting requirements.
Calculating
full-timers
A
full-timer is generally an employee who works on average at least 30 hours per
week, or at least 130 hours in a calendar month.
A
full-time equivalent involves more than one employee, each of whom individually
isn’t a full-timer, but who, in combination, are equivalent to a full-time
employee.
Seasonal
workers
If
you’re hiring employees for summer positions, you may wonder how to count them.
There’s an exception for workers who perform labor or services on a seasonal
basis. An employer isn’t considered an ALE if its workforce exceeds 50 or more
full-time employees in a calendar year because it employed seasonal workers for
120 days or less.
However,
while the IRS states that retail workers employed exclusively for the holiday
season are considered seasonal workers, the situation isn’t so clear cut when
it comes to summer help. It depends on a number of factors.
We
can help
Contact
us for help calculating your full-time employees, including how to handle
summer hires. We can help ensure your business complies with the ACA.
