Calling an Expected Full-Time Hire Variable
If you reasonably expect 30 hours or more at the start date, the hire is measured monthly, not through an initial measurement period. A job posting that says full-time is hard to walk back.
The three things to know.
What the Regulation Looks At
The facts at hire: posted hours, offered schedule, comparable roles and what the employer actually expects.
How It Goes Wrong
Using the initial measurement period for new hires in roles that are full-time in practice. The employee is offered coverage late, and a payment can follow.
The Fix
Classify at hire from the role description. Use the initial period only where hours are genuinely uncertain.
Sources: 26 CFR § 54.4980H-3. General information, not legal advice.
A worked example.
A Full-Time Job Treated as Variable
A hospital posts a full-time position at 36 hours a week, but puts all new hires through a 12-month initial measurement period.
What the Rule Produces
Because the role was expected to be full-time at hire, the initial measurement period is not available, and the employer should have offered coverage by the first day of the fourth month. It faces a payment for the months without an offer.
Four steps to apply it.
1. Review postings
Check the hours stated.
2. Classify by role
Decide expectation at hire.
3. Use the initial period only where uncertain
Document why.
4. Offer on time
Make the offer by month four.
Where it goes wrong. Applying one onboarding process to every hire.
The questions that come up next.
Can a full-time role be variable-hour for some hires?
Only if the facts for that hire differ. The role description alone does not decide it.
Does a probation period change it?
The expectation of full-time hours at the start date still decides.
Is the three-month rule a cure?
It can limit exposure for the first three full months, but it does not change the classification.
What if the role changes after hire?
Document the change and review at the next measurement.
Does a union role differ?
The expectation of 30 hours or more still governs.
Plan-specific questions belong with ERISA counsel, and we will bring them in.
Related pages on the look-back method.
Skipping the Second Test
A new variable-hour hire must also be tested on the first full standard measurement period after the start date.
Using Look-Back for Large Employer Status
Large employer status is a monthly count of full-time employees plus full-time equivalents.
The Full Look-Back Guide
Every rule, example and source behind this page, in one place.
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