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Seasonal Workers in the ALE Count


*Asked of the IRS in a group call on May 15, 2015.

“The employer must look at all employees when counting heads for ALE status. However, the regulations provide an exception for seasonal workers – employees who perform labor or services on a seasonal basis as defined by the Secretary of Labor, including retail workers employed exclusively during holiday seasons.

If the employer had more than 50 full-time and full-time equivalent employees for 120 days or less, and the excess over 50 were seasonal workers, the seasonal workers can be excluded from the count and, as a   result, the employer will not be an applicable large employer.

Now this exception sounds a bit complicated, but the regulations include examples for counting seasonal workers, and here’s another important rule to note:

Under a longstanding provision that also applies for other tax and employee benefit purposes, companies with a common owner or that are otherwise related generally are combined and treated as a single employer for determining ALE status. (These rules are found in Section 414(b), (c), (n), and (o) of the Internal Revenue Code; they’re called the 414 or Controlled Group Rules.) If the combined number of full-time and full-time equivalent employees for the group is large enough to meet the ALE definition, then each company in the group – called an applicable large employer member – is considered to be an ALE, even if it separately would not be.”

Tim Berger | Tax Law Specialist, Internal Revenue Service
Exempt Organizations Office, Tax Exempt and Government Entities Division | Washington, DC

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Last Review:  8/5/2022 – Revision: 2.0

Applies To:  ACA Reporting Requirements

Categories:  Year End –Prerequisites 1094-C

Keywords:  Seasonal

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