The Internal Revenue Service (IRS) issued IRS Health Care Tax Tip 2016-77 to remind employers that seasonal workers need not be counted when determining whether an employer is an applicable large employer (ALE). "Seasonal workers" are workers who perform labor or services on a seasonal basis, as defined by the Secretary of Labor, and include retail workers employed exclusively during holiday seasons. In Tax Tip 2016-77, the IRS explained:
If you have at least 50 full-time employees, including full-time equivalent employees, on average during the prior year, your organization is an ALE. Here's the exception: If your workforce exceeds 50 full-time employees for 120 days or fewer during a calendar year, and the employees in excess of 50 during that period were seasonal workers, your organization is not considered an ALE. For this purpose, a seasonal worker is an employee who performs labor or services on a seasonal basis.
Although the term "seasonal worker" is relevant when determining ALE status, which impacts whether an organization must comply with the employer shared responsibility provision, the term "seasonal employee" is relevant for determining an employee's status as a full-time employee under the look-back measurement period. For purposes of the look-back measurement method, a seasonal employee means an employee who is hired into a position for which the customary annual employment is six months or less and for which the period of employment begins each calendar year in approximately the same part of the year, such as summer or winter.