Affordable Care Act Compliance Question

Question: Is there a difference between a “seasonal worker” and “seasonal employee” for Affordable Care Act (“ACA”) purposes?

Answer:  Yes.  There are two different “seasonal” concepts under the ACA.  There is a “seasonal worker” concept for purposes of determining whether an employer is an Applicable Large Employer (ALE) for ACA purposes.  There is also a separate “seasonal employee” concept for purposes of determining whether an individual employee qualifies as full-time under the ACA.

“Seasonal Worker”.

The number of seasonal workers may affect whether an employer is an ALE.  Under the ACA, employers that have at least fifty (50) full-time, including full-time equivalent employees, are ALEs who are subject to the ACA Employer Shared Responsibility Provision (“Employer Mandate”).  The ACA provides a narrow exception for seasonal workers where they do not count as employees when determining whether an employer is an ALE, if the following two conditions are both satisfied:

• The employer’s workforce exceeds 50 full-time employees, including full-time equivalents, for 120 days of fewer during a calendar year; and
• The employees in excess of 50 full-time employees during that period of 120 days or fewer were seasonal workers. Seasonal workers are workers who perform labor or services on a seasonal basis, such as ski instructors or retail workers employed exclusively during holiday seasons.

“Seasonal Employee”.

Seasonal employees are employees who are hired into a position for which the customary annual employment is six months or less.  An ALE may adopt the look back safe harbor measurement method to determine whether a seasonal employee measures as a full-time employee under the ACA, or use the monthly measurement method.