As restaurant operators are hiring and training seasonal staff for the busy period from Memorial Day through Labor Day, they have to consider how seasonal workers may affect the restaurant under Internal Revenue Service rules for the Affordable Care Act.
Although seasonal staff was expected to be exempt from the ACA requirements, that is not necessarily the case. Alas, not much is simple about the law. Even defining these hires is confusing, thanks to two terms: “seasonal worker” and “seasonal employee.”
“Seasonal worker” is used to determine if an operator is a large employer—having the full-time equivalent of more than 100 workers this year, tightening to more than 50 workers starting next year—that must provide health insurance to full-timers or face fines.
But an employer is not classified as large if it exceeds that number due only to seasonal workers employed 120 days or fewer per year in actual seasonal jobs.
“Seasonal employee” is for ascertaining a worker’s status for large employers. Under special rules to measure full-time employment over a 12-month “look-back” period, seasonal employees may not be full-time, despite their weekly work hours, if they are hired into a job having customary annual employment of less than six months a year.
Not surprising, the rules “are creating all sorts of problems,” says Angelo Amador, senior vice president of labor and workforce policy at the National Restaurant Association. “Operators are now doing calculations all the time” regarding seasonal staff.
One potential solution is the bipartisan Simplifying Technical Aspects Regarding Seasonality (STARS) Act, which would make “seasonal employee” the only definition. Introduced last year, the bill has gone nowhere.
“Everyone is in a holding pattern now,” awaiting the U.S. Supreme Court ruling on tax subsidies in the ACA, Amador says.
“I think a lot is going to happen after that,” he adds.