What is a Common Law Employee? – TY 2017

The first step in preparing for ACA reporting is identifying all of your common law employees.

Common Law Employee

The IRS defines an employee as anyone who performs services for you if you can control what will be done and how it will be done. This includes when you have given the employee freedom of action. They are considered your employee if you have the right to control the specifics of how their services are performed.

For example, an experienced car salesperson may work at an auto dealer under minimal supervision in closing and financing sales. However, because they work a certain number of hours on an assigned schedule, require management approval for trade-in appraisals, and must report to a superior, they would be considered an employee of the auto dealer.

Once you have identified common law employees, you can keep track of whose information you require for ACA eligible employees. This will help you begin the process of calculating totals for your Form 1094-C.

ACA reporting requirements also state that all eligible employees must receive copies of their Form 1095-C by mail.

After identifying your common law employees, the next step in preparing for ACA reporting is calculating your monthly number of full-time employees.

Need More Information?

For more information on Form 1095-C filing, please view the IRS Instructions or check out our other blog posts linked below:

• Identify full-time employees
• Employer Shared Responsibility
• Determine a contact phone number
• Affordability Safe Harbors
• Identify Covered Individuals and gather information
• Import Spreadsheet Format Guidelines

If you have any further questions, concerns, or comments about our product, feel free to contact us. A customer support representative will reach out to you promptly.

About Author