Commentary

How seasonal workers change your ACA compliance status

How do you define a seasonal worker? How do you track them? And how could they change your ACA status? An expert shares the most important things you should know about seasonal workers and health care compliance.

May 4, 2017

By Arthur Tacchino, chief innovation officer, SyncStream Solutions

Affordable Care Act compliance can be difficult enough when you have variable-hour workers on your hands. Now with summer approaching, restaurant owners are ramping up hiring of seasonal workers who also have variable hours, so there's another, stickier layer of complexity you have to deal with.

How do you define a seasonal worker? How do you track them? And how could they change your ACA status? The answers are hard to find — but not too hard to answer. Here are some of the most important things you should know about seasonal workers and health care compliance.

How seasonal status can redefine your size

Employees come in three different types under the ACA: full time, part time and seasonal. The first two are defined by the number of hours an employee works per week (30 hours is the cutoff for part-time). The third, however, is decided by the number of days worked in a calendar year.

If any employee works 120 days or fewer in a calendar year, due to a seasonal demand (such as summer vacation, holidays, or industry-specific events like harvesting), they are considered a seasonal worker, and can be counted differently than regular part- or full-time employees when it comes to ACA compliance.

However, this difference comes into play for only one piece of the ACA's reporting requirements: your status as an applicable large employer. If an employer's workforce exceeds 50 full-time employees for 120 days or fewer during a calendar year, and the employees in excess of 50, who were employed during that period of no more than 120 days were seasonal workers, the employer is not considered an applicable large employer.

If you're a large business with more than 50 full-time employees already in the bag, you probably don't have to worry. However, if you're just around the cusp, and you know that you typically have an employee surge over the summer or holidays, this could easily make or break your ALE status.

Seasonal workers: They're just like everyone else

It's tempting to overlook seasonal workers in the rest of your reporting efforts since they receive special treatment when determining ALE Status. But you need to prove that they don't reach full-time status (so you don't owe them an offer of health care) and that they truly are a seasonal worker, and therefore worked fewer than 120 days that year.

Like any other variable-hour worker, their hours must be tracked and monitored so you can confirm their “seasonal” status. Particularly in the restaurant industry, where hours change at a moment's notice and shifts swap due to scheduling conflicts, accurately tracking each employee's hours can be your only defense against a fine or penalty if the IRS comes knocking.

To ensure an airtight paper trail for these requirements, you need to leverage technology designed to track and make sense of this kind of data. Payroll technologies have a huge edge over disorganized Excel spreadsheets, and intelligent solutions designed specifically to deal with the ACA will save hours of effort in double checking if your employees fall into the full-time, part-time, or seasonal category.

Seasons change, and so does health care

With health care on the verge of change, it seems safe to let your guard down when it comes to tracking your variable-hour employees. However, that risk may seriously hurt you in the long run, particularly because Congress has yet to mention employer reporting in its changes to the ACA. This means that reporting is likely to remain intact.

Slack off in the upcoming summer months, and you could risk a ton of backlogged, confusing data on your seasonal and variable-hour workers when reporting season rolls around. And it will roll around — no matter what health care reform surfaces, the government will need to track offers, prices, and coverage so that it can properly distribute related subsidies.

Seasonal workers don't have to overcomplicate your reporting; just make sure you're taking the proper measures to track your data, update your technology, and ensure you're correctly recording your employees' ACA statuses.

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