The ACA Employer Mandate: Who is Full-Time?
An employer's number of full-time employees is crucial to the determination of whether penalties should apply and the calculation of those penalties. The IRS approved the use of two different determination methods: Monthly Measurement Method and the Look-Back Measurement Method. Each method considers an employee's “hours of service”. Hours of service includes hours worked, paid PTO, paid holiday, disability or other similar leave of absence (except when an employee is receiving compensation under a workers' compensation or a state wage replacement program or from an arrangement in which the employer did not contribute. Employers must use the same measurement method for all employees other than for the following employee classifications: (i) hourly v. salaried, (ii) employees in different states; (iii) union v. non-union; and (iv) employees in different union groups. Monthly Measurement Method (MMM): Similar to how employe...