Seasonal Workers and PPACA: A Little Closer Look
Health care reform (PPACA) requires employers to count their employees and count employees' hours. Then employers have to figure out who is part-time and who is full-time. But what about those folks who are seasonal workers? How do they fit in?
Well, first we know that, as of January 1, 2014, an employer has to figure out if it is a “large employer” with 50 or more full-time equivalents. We know we get there by how many full time equivalent employees we have (FTEs) which is full-time employees and part-time employees (as fractional employees). But for seasonal, how do we count them? PPACA provides that under the "seasonal worker exception," these employees may not count. The exception applies if, during the prior calendar year, (1) an employer’s total number of FTEs is more than 50 on only 120 or fewer days, and (2) seasonal workers were the only reason the 50 FTE threshold was exceeded during this period. So you don't necessarily count the days a seasonal employee worked, but rather the total number of people you had including the seasonal folks. If you go over 50 on 120 or fewer days, you are not large.
Ok, so what if you are large? Do seasonals get coverage? The good news is that even if you are large, you may not have to provide coverage to seasonal workers, even ones who work full time during the season. The "safe harbor" rules for seasonal employees show us how to look at seasonal workers during a measurement period. Under the safe harbor, if an employer (1) reasonably (and honestly) classifies certain of its employees as “seasonal,” (2) tracks their hours over the full measurement period, and (3) finds that they averaged fewer than 30 hours per week during that entire period, the employer may classify those employees as something other than full-time. In other words, define them as seasonal, only use them seasonally and then measure their worked hours over the full measurement period, not just the season they worked.
So some good steps to dealing with the seasonal employees issue might be to (1) clearly define them as seasonal and tell them, (2) limit their employment to a reasonable "season" (probably fewer than 120 consecutive days), and (3) clearly designate them as seasonal when you do your calculations for large employer status and for eligibility. I suspect that where employers will most likely get in trouble is when they either don't make it clear to employees they are seasonal, or don't limit their employment to a defined "season." If you need help defining who is a seasonal worker, what their season of employment is or how they effect your counting employees under PPACA, ask you attorney at Fox Rothschild for guidance.
