Hours of Service
“Section 4980H(c)(4) provides that, for purposes of
section 4980H, a full-time employee is an employee who was employed on average
at least 30 hours of service per week.”
This section of the Internal
Revenue Code (IRS), under the regulations of the employer mandate, specifically
uses the word “service” to identify the full-time employee and to
calculate their equivalent. Traditionally, employers define a full-time
employee as a person who works 40 hours a week. However, the employer mandate is
more specific on the number of hours and the type of hours that constitute a
full-time employee (or their equivalent).
As defined by Section C. of the
Internal Revenue Code, Hours of Service include every hour in which an employee
is paid, or entitled to payment for performing duties for the employer. The
Code further explains Hours of Service as periods of time when the employer is
not performing duties, but is paid or entitled to payment. For instance, Hours
of Service include vacation, holidays, illness, incapacity (including disability),
layoff, jury duty, military duty, or leave of absence.
The definition provided by the IRS, in accordance
with the employer mandate, should be applied to identify your full-time employees
and to
calculate their equivalent. Correctly determining your full-time employees
(or their equivalent) will establish your Applicable
Large Employer (ALE) status. Applying the incorrect definition of Hours of
Service could activate a domino effect of errors. Those errors include miscalculation
of employees and misclassification of your business. This could leave your
business at risk of penalties or result in preparing for regulations that may
not apply to your business.
Mario K. Castillo
Telephone: 281.493.5529
Website: http://www.montyramirezlaw.com/
posted by Monty & Ramirez LLP
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10:09 AM
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