PPACA provides for compliance for “large” employers, which means more than 50 full-time employees.  Many employers have questions about how to calculate full-time status.  Fortunately, the IRS has issued several guidance notices that explain some 'safe-harbor" methods that, if used, would be consider appropriate methods of making this calculation.

Most recently, Notice 2012-58 provides for a “safe harbor” employers can use relating to ongoing employees.  Under this method, there is a look-back period used to measure full-time status. The guidance provides for a “standard measurement period” that the employer can use. The measurement period has to be at least 3 consecutive months, but no more than 12 consecutive calendar months.  The guidance also explains the “stability period.” Employees who averaged at least 30 hours each week during the measurement period are full-time employees during a subsequent stability period, regardless of the employee's number of hours of service during the stability period and provided that the employee continues to be an employee. So once an employee averages 30 or more hours per week during the measurement period, they remain full-time employees through the stability period. The stability period must be (1) a least as long as the measurement period, (2) at least 6 months, and (3) measured AFTER the standard measurement period. The good news is that, for employees who did not work full-time during the measurement period, their status does not change during the stability period.

The Notice also provides explanations of how to deal with “New Employees Reasonably Expected to Work Full Time” as well as “Variable and Seasonal Employees.” This notice, in conjunction with prior notices, are designed to help employers sort out how they can make calculations without running afoul of the law, hence the “safe harbor” nomenclature. One of these options might be best for your company, so make sure to review them and ask questions of your professionals about how they work.

See also Notices 2011-36, 2011-73, 2012-17