What is a Full-Time Employee?

When beginning your ACA filing, it is important to know who is considered a full-time employee. Determining who is considered a full-time employee may be more difficult than it initially seems.

For purposes of Employer Shared Responsibility provisions, the IRS defines a full-time employee as such:

[A]n employee is a full-time employee for a calendar month if he or she averages at least 30 hours of service per week. Under the final regulations, for purposes of determining full-time employee status, 130 hours of service in a calendar month is treated as the monthly equivalent of at least 30 hours of service per week.”

IRS Identifying Full-Time Employees

The number of full-time employees an employer has determines Applicable Large Employer (ALE) status, which is critical for ACA compliance. This will also affect whether Employer Shared Responsibility Provisions (ESRP) may apply to their business, whether an ESRP payment is owed, and if applicable, the amount of such payment.

An ALE, or ALE Member, is generally an employer with 50 or more full-time and full-time equivalent employees in the previous year. It can also be a group of employers that, combined, employed on average 50 or more full-time and full-time equivalent employees in the previous year. This is also known as an Aggregated ALE Group.

If an employer is considered an ALE, then they are required to offer Minimum Essential Coverage (MEC) at Minimum Value (MV) to at least 95% of it’s full-time employees, along with their dependents.

Classifying Employer Size
Classifying Employer Size

How do I determine whether an employee is considered full-time?

The IRS provides two methods of measurement in determining whether an employee is classified as a full-time employee: the monthly measurement method and the look-back measurement method.

Monthly Measurement Method

Under this method, the employer would determine each employee’s status by counting each employee’s number of service hours for each month of the year. If the employee has 130 hours of service in a calendar month or at least 30 hours of service per week, then they are considered full-time.

Look-Back Measurement Method

An employer may determine the status of an employee during a future period (referred to as the stability period), based on the number of service hours of the employee in a prior period (referred to as the measurement period).

This method is only available for the purposes of determining and computing liability for an Employer Shared Responsibility payment. This method is not for determining whether an employer is an Applicable Large Employer (ALE).

The look-back measurement method also provides special rules that apply in various circumstances, such as variable-hour employees, seasonal employees, and employees of educational organizations.


Identifying the monthly number of full-time employees will prepare the employer for reporting the monthly totals required for Form 1094-C. This will also help estimate how many Form 1095-C copies will need to be issued to ACA eligible employees.

Be sure to check the due dates for ACA filing and furnishing recipient copies to ensure you stay ahead of the deadlines.

BoomTax, The Boom Post, and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors prior to engaging in any transaction.

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