Staffing and Temporary Work
The regulation includes specific examples for temporary placements. The deciding question is whether a typical worker can reasonably be expected to average 30 hours at the start date.
The three things to know.
The Core Question
If placements are short, hours uneven and the worker can decline work, a new hire may be treated as variable-hour. If placements are long and renew continuously, expect full-time.
The Gap Weeks
Gaps between assignments matter for the average and for the rehire rule. Track them carefully.
Who Is the Employer
Common-law control decides. Arrangements with clients, PEOs or leasing firms need review.
Sources: 26 CFR § 54.4980H-3. General information, not legal advice.
A worked example.
A Staffing Firm With Uneven Placements
A staffing firm places a worker for four weeks in March, a gap of two weeks, then six weeks in April and May, and so on.
What the Rule Produces
Across a 12-month window she works about 28 hours a week on average and is not full-time. Gap weeks count in the average unless they meet the rehire break rule.
Four steps to apply it.
1. Collect assignment data
Gather start and end dates and hours.
2. Count the gaps
Include weeks without work in the average.
3. Measure the window
Total hours across the year.
4. Apply the result
Hold status for the stability period.
Where it goes wrong. Ignoring gap weeks, which can overstate the average.
The questions that come up next.
Do staffing firms use look-back?
Many do, because assignments are uneven. The method suits that pattern.
Does a client company have exposure?
Where the client is the common-law employer or part of a controlled group, yes. Review contracts with counsel.
What about assignments that end?
The employee stays in their measurement window and stability status unless a rehire or break rule applies.
Is a worker between placements still an employee?
Generally yes, if the employment relationship continues. Review the facts with counsel.
Do client companies share responsibility?
Where a client is a common-law employer or in a controlled group, yes.
Plan-specific questions belong with ERISA counsel, and we will bring them in.
Related pages on the look-back method.
Seasonal Operations
Workers hired for a position with customary annual employment of six months or less can be treated as seasonal for new-hire measurement.
How the (a) Penalty Compounds
The 4980H(a) payment is calculated on all full-time employees less the first 30, not only on those left out.
The Full Look-Back Guide
Every rule, example and source behind this page, in one place.
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