Many employers bring on short-term or part-time help at the end of the year to support holiday operations. Seasonal employees are hired for positions that last six months or less and occur at roughly the same time each year (e.g., holiday retail roles). While these hires may work only a few weeks, they still count for Affordable Care Act compliance. Understanding how variable hour, seasonal and part-time employees are treated under ACA rules helps HR avoid unexpected eligibility issues or reporting errors.
How ACA Categories Affect Eligibility
Under the ACA’s employer mandate, employers must offer health coverage to full-time employees who work an average of 30 or more hours per week. For employees whose schedules are inconsistent or limited, employers may use the look-back measurement method to determine whether coverage must be offered.
Variable Hour Employees
Variable hour employees are those for whom the employer cannot determine at the date of hire whether they will average 30 hours per week. Their hours are tracked during a defined measurement period, usually 6 to 12 months. If they average 30 or more hours during that period, they must be offered coverage during the following stability period.
Seasonal Employees
Seasonal employees are hired into positions that last six months or less and that occur at roughly the same time each year. Holiday hires often fall into this category. Using the look-back measurement method allows employers to avoid offering coverage immediately to seasonal hires who may temporarily exceed 30 hours/week during peak season. Seasonal employees can be placed into an initial measurement period so their short-term service does not create immediate eligibility. If their average hours stay below 30 per week during the measurement period, no offer of coverage is required in the stability period. Document the seasonal nature of the role in job descriptions and onboarding materials to support ACA compliance.
Part-Time Employees
Employees scheduled to work fewer than 30 hours per week can be classified as part-time at hire. Employers must still track their hours to confirm they do not average up into full-time status.
Special Considerations for Holiday Hiring
Holiday or Christmas help can raise compliance questions because their schedules often fluctuate and may temporarily exceed 30 hours per week. HR should keep the following in mind:
Why This Matters
Incorrectly classifying holiday hires or failing to track hours can lead to inaccurate 1095-C reporting or missed offers of coverage. Both can trigger IRS penalty exposure. Establishing clear definitions for variable hour, seasonal and part-time roles, and applying a consistent measurement method, helps employers stay compliant while managing seasonal staffing needs.
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This article is for informational purposes only and is not intended as legal, tax, or benefits advice. Readers should not rely on this information for taking (or not taking) any action relating to employment, compliance, or benefits. Always consult with a qualified professional before making decisions based on this content.