Employees Found Not Full-Time
For employees found not full-time, the stability period cannot be longer than the measurement period. A short window therefore sends part-time staff back through testing sooner.
The three things to know.
The Symmetry Rule
Part-time results cannot be held longer than the window that produced them. A six-month window means a part-time result lasts no more than six months.
What It Means for Design
If you want part-time employees reconsidered promptly, use a shorter window. If you want stability, use a longer one.
Offers Are Still Optional
No mandate offer is required for an employee found not full-time during the stability period. Plan eligibility rules may still allow it.
Sources: 26 CFR § 54.4980H-3. General information, not legal advice.
A worked example.
A Part-Time Result With a Six-Month Window
An employer uses a six-month measurement period. A cashier averages 24 hours a week over the window and is found not full-time.
What the Rule Produces
Her stability period cannot exceed six months, so she is measured again at the next cycle. If her hours rise to 31 a week, she is found full-time at the next result and offered coverage for that stability period.
Four steps to apply it.
1. Record the result
Document the average for each part-time employee.
2. Set the stability period
Keep it no longer than the measurement period.
3. Re-measure
Run the next cycle on schedule.
4. Offer on time
Make an offer to anyone newly found full-time.
Where it goes wrong. Holding a part-time result longer than the window that produced it.
The questions that come up next.
Can a part-time employee become full-time mid-period?
Not for the penalty test. Their status holds until the stability period ends unless a special transition rule applies.
What if they ask for coverage?
Your plan terms decide. If they are eligible under the plan you can enroll them, regardless of mandate status.
Do we report them?
Reporting is by month for each full-time employee. Employees found not full-time are reported with the codes that apply to them.
Can a part-time result be held for a year after a six-month window?
No. The stability period for employees found not full-time cannot exceed the measurement period.
What do we tell the employee?
Tell them their result, how it was measured and when it will be reviewed.
Plan-specific questions belong with ERISA counsel, and we will bring them in.
Related pages on the look-back method.
The Seasonal Hire
A ski instructor hired November 15 into a position with customary annual employment of six months or less can be treated as seasonal and measured over an initial measurement period of up to 12 months.
The Temporary Placement
A staffing employer whose workers take short, uneven assignments can treat a new hire as variable hour.
The Full Look-Back Guide
Every rule, example and source behind this page, in one place.
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