BlogsHow Does the ACA Define a Full-Time Employee?

August 12, 2015, by Matt Hanson

Determining whether an employee is full-time has become more difficult with the ACA’s new definition. Though most companies define a full-time employee as one that works a 40-hour work week, the law now states anyone who works over 30 hours a week or 130 hours a month should qualify as full-time.

What about seasonal and variable hour employees though? These two types of employees present particularly difficult challenges, as they can, and sometimes do, have varying hours depending on the week. This is especially true of seasonal workers, whose schedules are dictated by the holidays. Variable hour employees also make it difficult for HR departments, as their schedules are always in flux and may sometimes work less or more than 30 hours.

However, the Internal Revenue Service has helped clear up the issue somewhat by giving employers more flexibility in the time period they use to assess employees. The IRS allows firms to use a retrospective measurement period lasting between three and 12 months in order to assess whether an employee is full-time. Employers can also divide their employees into different sections such as hourly, salaried and collective bargaining.

Not complying with the ACA regulations for a full-time employee can mean a hefty fine per full-time employee (their definition, not yours) per month, so know the rules and regulations. To learn more, download our free white paper here.