Retail
Holiday spikes and seasonal hires create a workforce that looks full-time for eight weeks a year. A 12-month window shows who actually averages 30 hours.
The three things to know.
The Holiday Problem
Hiring surges in the fourth quarter put many people near or above 30 hours for a few weeks. A short window would treat them as full-time, while a 12-month window averages the surge out.
Seasonal Rules
Positions with customary annual employment of six months or less can be treated as seasonal, which allows an initial measurement period.
Part-Time Core
Retail often relies on a large part-time group. The look-back method keeps status stable for that population.
Sources: 26 CFR § 54.4980H-1; 26 CFR § 54.4980H-3. General information, not legal advice.
A worked example.
A Holiday Associate
A retailer hires 40 holiday associates in October, each working about 35 hours a week through December, then dropping to about 12 hours a week after the holidays.
What the Rule Produces
Averaged across a 12-month window, most come to well under 30 hours a week and are not full-time. A monthly design would have required offers in the holiday months, as each person crossed 130 hours.
Four steps to apply it.
1. Classify the hires
Decide seasonal or variable-hour at hire.
2. Choose the window
Use the initial measurement period.
3. Total hours
Add hours over the window.
4. Hold status
Apply the result for the stability period.
Where it goes wrong. Hiring in a pattern meant to avoid the mandate, which the rules do not respect.
The questions that come up next.
Do we count holiday hires in the 50 line?
They count in the monthly figures, with the seasonal-worker exception for workforces that exceed 50 for 120 days or fewer a year.
Should we hire early to avoid full-time status?
Do not design hiring to avoid the mandate. The regulations disregard arrangements aimed at circumventing the rules.
What about returning seasonal staff?
They are new hires or continuing employees depending on the length of the break.
Can holiday hires be treated as seasonal?
If the position’s customary annual employment is six months or less, yes.
What if some return next year?
The rehire rules decide whether they are new or continuing.
Plan-specific questions belong with ERISA counsel, and we will bring them in.
Related pages on the look-back method.
Health Care
Per-diem, as-needed and agency-like staff work irregular schedules by design.
Education
Educational organizations get a 26-week rule for treating a returning employee as new, and an averaging rule for employment break periods, so summer breaks do not erase a school year.
The Full Look-Back Guide
Every rule, example and source behind this page, in one place.
Talk it through with someone who runs this every year.
We help you choose the design, document it and reconcile the hours before the numbers reach your reporting.
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