Expected Full-Time
If you reasonably expect a new hire to work 30 hours a week or more, you cannot use an initial measurement period. You measure from the start date and make an offer on time.
The three things to know.
The Test Is Reasonable Expectation
Look at the facts at the start date: the posted hours, the schedule offered, the hours of comparable roles. A job advertised as full-time is expected to be full-time.
The Three-Month Rule
An employer is not subject to a payment under the 95% offer test for a new full-time employee’s first three full calendar months if coverage is offered by the first day of the fourth month and the employee is otherwise eligible.
Then Measure Monthly
From the start date the employee is treated as full-time and measured under the monthly method until the look-back method can apply on its own timeline.
Sources: 26 CFR § 54.4980H-3; 26 CFR § 54.4980H-4. General information, not legal advice.
A worked example.
A Posted 40-Hour Job
A distributor posts a warehouse job at 40 hours a week and hires a worker on March 12.
What the Rule Produces
The employer reasonably expects full-time hours, so the worker is measured monthly from March 12. To use the three-month rule, coverage must be offered by the first day of the fourth full calendar month, which is July 1. An initial measurement period is not available for this hire.
Four steps to apply it.
1. Classify at hire
Decide the full-time expectation from the posting and schedule.
2. Record the reason
Keep the posting and offer letter.
3. Calendar the offer date
Set the first day of the fourth full month as the deadline.
4. Measure monthly
Track hours month by month after hire.
Where it goes wrong. Treating every new hire as variable-hour for convenience.
The questions that come up next.
What if the schedule turns out lighter?
The expectation at hire is what matters. Document how you formed it, and review roles where actual hours routinely fall short of what you posted.
Can we use a waiting period?
Waiting periods are permitted within limits, and the coverage waiting period cannot exceed 90 days. The three-month rule works alongside it. Have counsel confirm the combination for your plan.
Do part-time roles ever qualify as expected full-time?
Only if the facts support it. A role expected to average under 30 hours is not an expected full-time role.
What if the worker leaves in month two?
No offer obligation continues after employment ends. Keep records of the dates.
Does an hourly full-time role differ?
No. The expectation of 30 hours or more governs, not the pay type.
Plan-specific questions belong with ERISA counsel, and we will bring them in.
Related pages on the look-back method.
Variable Hour
A new hire is a variable-hour employee when you cannot tell at the start date whether they will average 30 hours.
Seasonal and Part-Time
Seasonal and part-time new hires can be measured over an initial measurement period, because their hours are not expected to reach 30 a week on a steady basis.
The Full Look-Back Guide
Every rule, example and source behind this page, in one place.
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