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Do You Have Seasonal Workers? What To Know About Health & Retirement Benefit Obligations
This article was reviewed in July 2021 and is up-to-date.
As the summer season winds down, so do public agency departments that hire seasonal workers to staff summer camps, pools, extended park and recreation hours, and a myriad of season-specific facilities and activities. But, just how do seasonal workers impact the agency’s health and retirement benefit obligations?
- The Affordable Care Act (ACA), Seasonal Worker Exception
The number of seasonal workers you hire may impact whether your agency is subject to certain ACA obligations. Under ACA, employers that have at least fifty (50) full-time employees, including “full-time equivalent” employees, on average during a particular year, qualify as “Applicable Large Employers” subject to the Act’s shared responsibly and employer information reporting provisions for offers of minimum essential coverage.* However, ACA provides a limited exception to the Applicable Large Employer calculation for employers with “seasonal workers.” (Note: Admittedly, there’s a lot of ACA jargon here. For a primer on ACA, we recommend reviewing our March 2014 post.)
Under the exception, an employer will not be considered an Applicable Large Employer if the following are both true:
- the employer’s workforce exceeds 50 full-time employees (including full-time equivalents) for 120 days or fewer during a calendar year; and
- the employees in excess of 50 during that period were “seasonal workers.”
This exception is narrow, and must be carefully applied. For the purposes of ACA, a “seasonal worker” must be a worker who performs labor or services on a “seasonal basis,” such as a ski instructor or retail workers employed exclusively during holiday seasons. Seasonal based work means work that “ordinarily” pertains to or is of the kind exclusively performed during certain seasons or periods of the year, and which, “from its nature,” may not be continuous or carried on throughout the year. Accordingly, if your agency’s camp, park, or swimming pool is only operated during summer months, or if it operates at a high demand or for extended hours, only during summer months, the employees associated with the limited seasonal operation may qualify as “seasonal workers” under ACA. If the employment of those workers also lasts 120 days or less, they may be excluded from the agency’s Applicable Large Employer assessment.
As an aside: we caution that ACA also uses the term “seasonal employee,” which is used in the employer shared responsibility provision, in a different context than “seasonal worker.”
- California’s Healthy Workplaces, Healthy Families Act
Despite the ACA requirements discussed above, seasonal workers may be entitled to paid sick leave under California’s Healthy Workplaces, Healthy Families Act. Even a part-time, seasonal worker will be entitled to accrue paid sick leave if the employee works for at least 30 calendar days in a year. However, the employee must be employed for at least 90 days before he/she is entitled to use accrued time. When it comes to seasonal workers, be sure to check the 30/90 day requirements against your agency’s sick leave policy. In some cases, the agency’s policy may be more generous. In addition, employees returning to your agency for seasonal work within one year from their prior date of separation, are entitled to have previously accrued and unused sick days reinstated.
- The Public Employees’ Retirement Law (PERL), Seasonal Employment Exception
Careful consideration is required when determining whether “seasonal” workers are entitled to membership in the Public Employees’ Retirement System (PERS). Under the PERL, certain part-time or limited term employees are excluded from membership in PERS. Under any circumstance when the employer hires an employee who is already a member of PERS, the employee must be enrolled in membership with the employer, even if a seasonal worker. In addition, if full-time employment has a fixed term of more than six months, or more than one-year for a part-time employment (an average of at least 20 hours per week), the employee is entitled to membership. If seasonal employment in fact exceeds six months of full-time service or one year of part-time service (at least an average of 20 hours per week), the employee must be enrolled in membership with CalPERS. The most often cited membership thresholds for “seasonal” employees is 125 days of service (if paid on a “per diem” basis) or 1,000 hours of services (if paid on a basis other than “per diem”) in a fiscal year. If paid service equals or exceeds 125 days or 1,000 hours in a fiscal year, the employee will be entitled to membership. As summer comes to a close, and seasonal employees may still be “on the books,” PERS employers should review the actual number of hours and days the employee has worked in the current fiscal year, to determine whether the employee may now, or soon, be entitled to PERS membership.
For those of you ramping up on employees in the fall/winter season, begin planning ahead today. Fix contract terms for seasonal workers, ensure they do not exceed work hour / day limits established by the PERL or ACA. At the same time, ensure that your seasonal workers accrue paid sick leave, if they work for your agency for at least 30 days. And fear not; cooler days are ahead!