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Applicable Large Employer Status


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A client has chosen to use 1/1/14 - 6/30/14 to determine if it is an applicable large employer for 2015. They have chosen to use this time frame because they are a farming business with more employees in the later half of the year. If they have biweekly pay, how do we count full time employees on a calendar month basis? Are you allowed to use the weekly rule, where the period measured for the month must include the week that includes the 1st day of the month or the week that includes the last day of the month but not both? So it would essentially include 2 payrolls per month? Or is the weekly rule not allowed to determine ALE status?

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We are biweekly but our timekeeping systems can usually compile a report based on monthly dates (outside of payweeks) so you might look to see what timekeeping reports that they use and if they can report out differently. Because we were near the 50 FTEs I keep this calculation every month. And generally the months with more workdays meant a higher average and those with fewer meant a lower average. Unfortunately we have dropped in #s and now while we aren't close I still track it since we have a lot of very PT employees.

I would think you would need to do something to capture the hours that don't all into the two pay period/paycheck months, because at some point, you will have two 3 pay period/checks months (and every 10th year or so you will have one month that has three paychecks or 27 for the year). Otherwise you are undercounting by 1/13th of your total employee hours.

(an example of leaving out a whole paycheck would be October 2015 for us because our paychecks are dated 10/2, 10/16 and 10/30...if you went by either the week with the 1st or the week with the 31st, you would be leaving a whole pay period out of the calculation)

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