Under the Affordable Care Act, every employer must accurately identify its full-time employees to determine if it is subject to the employer mandate penalties and to calculate the amount of those penalties. Generally, a full-time employee is an individual that averages at least 30 hours of service per week. There are situations where the hours-per-week standard does not work well with established industry practices. We recently posted about the employer mandate Final Regulations being published. Those regulations address some of the scenarios where counting hours of service is especially difficult.
The regulations provide that certain hours will not be counted as hours of service in determining full-time status:
- Volunteers: Generally, volunteer hours are not counted to determine full-time status because they are not compensated. The Final Regulations clarify that volunteer hours for a government or tax-exempt entity will still not be counted even though the volunteer is reimbursed for reasonable expenses or receives reasonable benefits or nominal fees. The rule is intended to address volunteer firefighters, emergency responders and other similar workers.
- Student work-study programs: Hours worked by a student under federal or state-sponsored work-study programs are not counted to determine full-time status, even though the student is paid for those hours.
- Members of religious orders: The preamble to the Final Regulations provide that until further guidance is issued, Hours worked for a religious order by an individual who is subject to a vow of poverty as a member of that order will not be counted toward full-time status if the work is in performance of tasks required of an active member of the order.
The preamble to the Final Regulations recognizes that there are other categories of employees whose hours of service are difficult to track using the normal rules. Those situations are still being considered, but until guidance is issued, hours of service must be counted using reasonable methods. The preamble provides guidelines on what specific methods will (or will not) be considered reasonable for three categories of employees: adjunct faculty; employees with layover hours; and employees with on-call hours.
- Adjunct faculty: Until further guidance is issued, one reasonable method of crediting hours for adjunct faculty is to credit 2.25 hours per week for each hour of classroom time and any additional outside of classroom hours that the faculty member is required to spend on such things as office hours and faculty meetings.
- Layovers for airline industry employees and others: For employees with layovers, such as airline employees, any method of crediting hours is considered unreasonable if the employer fails to credit any hour of layover for which it provides additional compensation or that is counted by the employer towards the required hours of service needed for the employee to earn his or her regular compensation. For layover hours that do not trigger additional compensation or that are not counted towards the hours needed for the employee to earn his or her regular compensation, it is considered reasonable for the employer to credit at least 8 hours for each day that the employee is required to stay away from home for business purposes (16 hours for the two days encompassing an overnight stay). An employer must, however, credit an employee with his or her actual hours of service for a day if crediting 8 hours of service for the layover day substantially understates the actual hours of service performed by the employee that day.
- On-call hours: Some employees are compensated for being on call at an hourly rate, or as a condition of employment. For such employees, it is considered unreasonable if the employer fails to credit any on-call hour for which an employee is required to remain on the employer’s premises or for which the employee’s activities are substantially restricted.
While these rules may be replaced by later guidance, they provide some welcome certainty to employers that have workers who do not fit the typical 8 to 5 workday and will be helpful to them in developing a Health Care Reform compliance strategy for 2015 and beyond.