IRS Issues Seasonal Employee Guidance

On November 22, the IRS issued guidance to employers that hire seasonal workers.  Under the health care law, many employers may have questions as to whether they are subject to the law if they hire seasonal employees.  The issues hinges on whether the employer is an applicable large employer.

The IRS issued IRS Health Care Tax Tip 2016-77 to address this issue.  The key takeaway is:

“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.”

This guidance may offer some relief to small employers that hire seasonal workers.  As always, it’s important to understand your obligations as an employer under the ever changing legal landscape.