Step 4: Build the Hours Feed
Decide which system is the record of hours worked and paid, how non-hourly staff are counted, and how paid leave flows in.
The three things to know.
One Source of Truth
Payroll is usually the record. Scheduling and time clocks feed it and are reconciled to it.
Non-Hourly Staff
Choose actual hours, days-worked or weeks-worked for each classification, and test it against actual hours.
Paid Leave
Make sure paid time off and holiday hours are included in the feed.
Sources: 26 CFR § 54.4980H-3. General information, not legal advice.
A worked example.
A Payroll Feed Gap
An employer’s benefits platform imports hours from payroll but leaves out paid time off, so employees with long vacations appear to average fewer hours.
What the Rule Produces
Adding the paid-leave codes to the feed raises several employees above 30 hours a week and moves them into the full-time group. The fix is made before the window closes.
Four steps to apply it.
1. Pick the record
Name payroll the source.
2. Map the codes
Include worked and paid-leave codes.
3. Test
Compare a sample against pay stubs.
4. Schedule
Refresh the feed regularly.
Where it goes wrong. Importing only worked hours and omitting paid leave.
The questions that come up next.
Can the benefits platform pull hours automatically?
Many can, through payroll integrations. Check how the integration handles leave and rehires.
What if we have several payroll systems?
Consolidate the data in one place before the window closes.
Who owns it?
Payroll, with benefits as the reviewer.
Can the benefits platform pull hours automatically?
Many can through payroll integrations. Check how leave and rehires are handled.
What if hours are edited later?
Freeze a copy at close and document corrections.
Plan-specific questions belong with ERISA counsel, and we will bring them in.
Related pages on the look-back method.
Step 5: Audit Mid-Window
Check halfway through that hours are landing in the right employee records and that new hires are in the right measurement group.
Step 6: Close, Notify and Enroll
Total the hours, classify each employee, notify and enroll them inside the administrative period, and keep prior-period coverage running meanwhile.
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.
An independent employee benefits consulting firm. We look at the entire benefits program — cost, plan performance, risk and administration.
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