A contract award changes your headcount a year before it changes your obligations.
Applicable-large-employer status for a year follows the prior calendar year’s count of full-time employees plus full-time equivalents. For a contractor whose workforce follows program awards, that lag is the planning problem.
What the rule says, and what we do about it.
How the count works
- Full-time employees plus the full-time equivalents of part-time hours, averaged across the months of the prior year.
- A mid-year hire adds only part of a year to the average.
- The result sets status for the following year, at a threshold of fifty full-time equivalents.
Where it bites
- A program that doubles a workforce shows up as an obligation the following year, not when you hire.
- A recompete that shrinks the workforce does not end the obligation that year, because the prior year’s count governs.
- Businesses under common or related ownership are treated as one employer for the threshold, and each member then carries the obligation in its own name.
- Employees working only abroad are generally not counted.
What CFH does about it
- Runs the look-back against your award and recompete calendar.
- Models the cost of the offer as headcount ramps, so the plan is ready before the year it applies.
- Flags the year you cross, not the year it bites.
General information, not legal advice. Your wage determination and contract clauses govern, and contracts counsel decides how they apply to you. We bring counsel in.
Three things employers ask next.
What if we are close to the threshold?
Count monthly and compare against awards. A few months of ramp-up can move the average, and the prior year’s average sets the next year.
Do overseas employees count?
Employees working only abroad are generally not counted, and hours paid as income from sources outside the United States are excluded.
Do related companies count together?
Yes. Businesses under common or related ownership are treated as one employer for the threshold, and each member carries the obligation in its own name.
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