Full-Time Employee
An employee is full-time under the ACA when they average at least 30 hours of service per week, or 130 hours in a calendar month. The test looks at hours, not job titles or handbook labels.
The three things to know.
The Weekly and Monthly Test
The statute speaks in 30 hours a week. The regulations accept 130 hours in a calendar month as the monthly equivalent. Either way the count is hours of service, which includes paid leave and not only hours worked.
Handbook Labels Do Not Count
An employee your policy calls part-time who averages 31 hours is full-time for the mandate. Job title, pay type and department play no part in the test.
Why Status Drives the Penalty
Employer payments are calculated on full-time employees and on the offers made to them, so every misclassified person changes both the offer you must make and the base for any payment.
Sources: 26 CFR § 54.4980H-1; 26 CFR § 54.4980H-3. General information, not legal advice.
A worked example.
A Barista Who Hovers Near 30
Dana works a coffee shop schedule that runs 28 hours in some weeks and 34 in others. Over the 12-month measurement period her hours total 1,586.
What the Rule Produces
That is an average of about 30.5 hours a week, so Dana is full-time for the stability period, even though several of her weeks were under 30. Her title and the shop’s part-time label did not enter into it.
Four steps to apply it.
1. Define the test
Write down 30 hours a week and 130 a month as your standard, and the method you use.
2. Pull hours
Export hours of service for every employee for the window or month.
3. Classify
Compare each average with the line and record the result.
4. Offer
Make sure everyone classified full-time receives an offer on time.
Where it goes wrong. The common error is classifying by title or by the handbook’s part-time label. Status follows measured hours only.
The questions that come up next.
What if someone averages 29 hours?
They are not full-time for that measurement period or month. Because averages decide it, anyone who hovers near 30 hours deserves close tracking.
Do owners and officers count?
Status applies to common-law employees. Sole proprietors and partners are generally not employees for this purpose, so confirm how each owner is classified with counsel before leaving anyone out.
Does 130 hours a month apply under the look-back method?
The look-back method averages hours over the measurement period against the 30-hour weekly standard. The 130-hour figure is the monthly equivalent used under the monthly measurement method.
Do hours worked from home count?
Yes. Hours of service are counted wherever the work is done, as long as the employee is paid or entitled to payment for them.
What if our payroll week is not Monday to Sunday?
Use a consistent weekly or monthly period for each category and apply the same convention to every employee in it.
Plan-specific questions belong with ERISA counsel, and we will bring them in.
Related pages on the look-back method.
Part-Time Employee
A part-time employee, for ACA purposes, is anyone who does not average 30 hours of service a week.
Hours of Service
Hours of service include every hour worked plus every hour for which pay is made or due, such as paid vacation, holiday and sick time.
The Full Look-Back Guide
Every rule, example and source behind this page, in one place.
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