- Are You Subject to the Mandate? Whenever this requirement kicks in for your company, the ACA mandates that an employer with an average of 50 or more full-time employees per month provide health insurance to employees working more than 30 hours per week. Under the mandate, employers can’t just count regular full-time equivalent employees (FTEs) to figure out if they’re covered by the ACA. Instead, they have to consider the number of employees who, when their hours are combined, add up to an FTE. To determine the number of its FTEs under the ACA, an employer has to consider: (1) the number of full-time employees (meaning employees who work more than 30 hours per week); and (2) the number of hours worked per month by employees who work fewer than 130 hours per month, divided by 120. The number of FTEs of the employer is the sum of these two groups of employees.
- Who Do You Have to Cover? Employees who work 30 hours a week or more, on average, have to be offered coverage under the mandate. There are detailed rules about crediting part-time, variable-hour, and seasonal employees for their time to determine whether they get coverage.
To determine whether you have a mandate and who is covered by the mandate, you have to know how many hours employees are working per month and you need to know this before your compliance deadline kicks in. So, that means you can’t wait until 2016 to begin tracking hours and determining your ACA coverage obligations.
This may seem pretty basic, but many companies, especially smaller companies who may just bump up against 50 FTEs, aren’t always careful about tracking working time. This is now necessary in light of the ACA. In addition, there are other potential obligations to track working time. Here are a few:
- When a non-exempt employee claims they’re not getting paid enough overtime. Wage and hour laws require time records for non-exempt employees. In addition, when a non-exempt employee claims they are owed overtime pay, the burden is on the employer to show compliance with the law. It’s difficult to show that you’re paying an employee appropriately if you don’t know or can’t document how much they’re working. Of course, the employee has to accurately report his or her working time, but employers should have—and follow—policies that demand accurate time reporting. You should also manage supervisors and managers who inappropriately expect employees to work off the clock or unilaterally alter employee time records.
- When the Department of Labor comes calling. You’ll want written time records for non-exempt employees if either the state or federal Department of Labor comes knocking. Certain industries are at particular risk for Department of Labor audits, including industries that customarily utilize alternative pay methods, like pay for piece work, Belo plans, or similar arrangements that calculate pay for non-exempt employees based on something other than (or in addition to) the number of hours worked.