Many small business owners boost their workforce during certain times of the year to help with a higher number of customers. The most common times to hire seasonal workers are during the summer months and during the end-of-year holidays.
However, the number of employees a business hires can affect its obligations to provide health care coverage.
Employer benefits, opportunities and requirements are dependent upon the employer’s size and the applicable rules. If an employer has at least 50 full-time employees, including full-time equivalent employees, on average during the prior year, the employer is an ALE (Applicable Large Employer) for the current calendar year.
There is an exception, however, for seasonal workers, which are those who perform labor or services on a seasonal basis. If your workforce exceeds 50 full-time employees for 120 days or fewer during a calendar year, and the employees in excess of 50 during that period were seasonal workers, your organization is not considered an ALE.
The terms “seasonal worker” and “seasonal employee” are both used in the employer shared responsibility provisions, but in two different contexts. Only the term seasonal worker is relevant for determining whether an employer is an applicable large employer subject to the employer shared responsibility provisions. For information on the difference between a seasonal worker and a seasonal employee under the employer shared responsibility provisions see the IRS’s Question and Answers page. To see if your business is considered an Applicable Large Empolyer, click here.