Determining which employees are full-time employees is central to the employer shared responsibility provisions. An employer must identify its full-time employees as part of determining:
For purposes of the employer shared responsibility provisions, a full-time employee is, for a calendar month, an employee employed on average at least 30 hours of service per week, or 130 hours of service per month.
There are two methods for determining full-time employee status:
Under the monthly measurement method, the employer determines if an employee is a full-time employee on a month-by-month basis by looking at whether the employee has at least 130 hours of service for each month.
Under the look-back measurement method, an employer may determine the status of an employee as a full-time employee during what is referred to as the stability period, based upon the hours of service of the employee in the preceding period, which is referred to as the measurement period. The look-back measurement method may not be used to determine full-time employee status for purposes of ALE status determination.
For more information on each of these methods, see section 54.4980H-3 of the ESRP regulations.
An hour of service is:
Exclusion from the definition of hour of service is provided for services performed in certain capacities, which are not counted as hours of service for purposes of the employer shared responsibility provisions:
For more information about these exclusions, see our Questions and Answers page and section 54.4980H-1(a)(24) of the ESRP regulations.
Certain categories of employees have hours of service that are particularly challenging to identify or track. In other cases, general rules for determining hours of service in the employer shared responsibility regulations may present special difficulties. For these workers, employers are required to use a reasonable method of crediting hours of service that is consistent with the employer shared responsibility provisions. The preamble to the employer shared responsibility regulations provides guidance for the following categories on certain methods of determining hours of service that are reasonable and certain other methods that are unreasonable:
For more information about determining hours of service for certain categories of employees, see Q&A #23 in our Questions and Answers page and section VI.C of the preamble to the ESRP regulations.
More information about the employer shared responsibility provisions is available in our Questions and Answers. The Department of the Treasury and the IRS have also issued the following legal guidance related to the employer shared responsibility provisions:
More information is also available in this fact sheet PDF issued by the U.S. Department of the Treasury.