Many businesses rely on seasonal or part-time workers during peak periods — whether for the holidays, harvest season, commercial fishing, or special events. But how do these temporary workers affect your obligations under the Affordable Care Act (ACA)?
Here’s what employers and business owners need to know.
Seasonal Worker vs. Seasonal Employee
Although the terms sound similar, the IRS distinguishes between a seasonal worker and a seasonal employee for ACA purposes.
Seasonal Worker
A seasonal worker is someone who performs labor or services on a seasonal basis, usually not exceeding four months (120 days) in a year.
Example: Retail associates hired only for the holiday shopping season.
Seasonal Employee
A seasonal employee is hired for a position that customarily lasts six months or less during the same period each year, such as summer lifeguards or ski instructors.
How Seasonal Workers Affect ALE Status
The term seasonal worker applies when determining whether an employer qualifies as an Applicable Large Employer under ACA rules.
Exception for Seasonal Workers
If your workforce exceeds 50 full-time employees for 120 days or fewer during the calendar year, and those additional employees are seasonal workers, your organization is not considered an ALE for that year.
This means you won’t be subject to the employer shared responsibility provisions simply because of a short-term seasonal surge in hiring.
Key Takeaways
- Track your employee count carefully, including full-time equivalents.
- Know the difference between seasonal workers and seasonal employees—the terms apply in different contexts.
- Short-term increases in workforce due solely to seasonal workers typically won’t trigger ALE status.
- Maintain records of employment duration and hours worked in case of IRS review.
For questions about seasonal hiring, ACA compliance, and employer shared responsibility this year, contact us or your HR advisor.