The Affordable Care Act mandate has created a stir in the HR and Payroll world. One of the largest impacts that it has had is the redefining of terms. The concept of full time has been established as 40 hours a week since the mid 1920s. ACA has redefined this standard that is as old as the Model-T. Furthermore, they have refined the definition of hours. When discussing ACA, “hours” really means “hours of service.” Hours of service are paid hours that are clocked on the job and hours that are not paid, but the employee is available to the employer. This includes time that an employee is on call. There are specific rules that an employer must follow to include these hours in the total hours of service. This is largely dependent upon the employee’s ability, or lack thereof, to utilize time as their own. For example, if when on call and employee is required to stay in one particular area, they must be credited those hours of service.
As mentioned before, the concept of a 40-hour work week has been thrown out.
The new threshold for ACA has been dropped from 40 hours to 30 hours a week (or 130 hours a month). If the mandate has lowered the threshold, how does an employer classify an employee as full time? First off, an employer should be reasonable when they are classifying a new employee. A couple of questions can be asked to understand what reasonable means: Is the employee replacing someone who was full time? Was the job advertised as being full time? It must be noted that companies that use piece work or other methods that are not based on hours worked are not sheltered from the mandate. A reasonable method of converting piece work to hours of service is required.
Once an employer understands these new definitions the difficulty of ACA will begin to fade. In following these guidelines, the employer will be one step closer to mastering ACA.