Who is counted as a full-time employee and a full-time equivalent employee?
- A full-time employee is one who is employed for 30 "hours of service" per week or the equivalent of 130 "hours of service" in a calendar month.
- Seasonal workers are excluded unless they work for an employer for more than 120 days.
- Part-time employees are counted as full-time equivalent employees by adding their hours together for a particular month and dividing by 120.
- To determine the total number of full-time and full-time equivalent employees for a particular month, the employer must add together (a) the total number of full-time employees for the month, plus (b) a number that is equal to the total number of hours worked in a month by part-time employees, divided by 12.
An employer has the ability to use a look-back period, called a standard measurement period, for measuring full-time employees. The period cannot be less than three months nor exceed 12 months. Contact your legal counsel for further guidance.
- A company has 40 full-time employees and 15 part-time employees who each worked 24 hours a week (96 hours per month).
- 15 part-time employees x 96 hours per month per employee = 1,440 hours
1,440 divided by 120 = 12 full-time equivalent employees.
- 40 + 12 = 52 full-time or full-time equivalent employees.
The ACA includes a special rule under which, 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 an applicable large employer. Four calendar months will be treated as equal to 120 days.