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Tuseday Tidbits: Limited Term Employee?

You are not alone if you continue to be confused by the terms full-time, variable hour, seasonal and full-time equivalent as they apply to your employees.  Here are brief definitions for ACA Section 4580H (Employer “Play or Pay” purposes:

Full-time employee – Any employee who works or is expected to work an average of 30 hours a week or more.   For determining whether or not you are a “large employer”, these people count as one employee each.  These are also the ones to whom you must offer coverage if the mandate applies.

Variable hour employee – These are the employees about whom you don’t 
know at the time they are hired how many hours they will work.  Their hours will have to be tracked to determine if they are full-time.

Seasonal employee – This is the employee who works full-time but for a limited 
time frame.  For example, extra retail staff during the holidays or extra golf course staff during the summer.

Full-time equivalent – Once you have established who your full-time employees are, you take the composite hours of all of the other classifications, add and average them to determine the number of full-time equivalents you have. For example, if you have 10 variable hour and part-time employees who work a composite total of 700 hours a month, they are equal to 5.38 full-time equivalent employees (700 ÷ 130 hours).  Adding that number to your number of full-time employees gives you your total number 
of FTEs (full-time equivalents).

Clearly, tracking these can be complex and time-consuming.  E2E has software 
available that will track this for you, including the measurement periods that determine what these numbers mean now that you have them.  Ask us for a demonstration.