The bipartisan legislation will align the definitions of seasonal employment in the Affordable Care Act and streamline the applicable large employer determination process.
The National Restaurant Association praised Representatives Renacci (OH-16), Schrader (OR-5), Jenkins (KS-02) and Costa (CA-16) on the introduction of the “STARS Act of 2014.” The bipartisan legislation will align the definitions of seasonal employment in the Affordable Care Act and streamline the applicable large employer determination process.
“We thank Representatives Renacci, Schrader, Jenkins and Costa for introducing bipartisan legislation to address a major pitfall in the ACA which could have detrimental impact to restaurants nationwide,” said Scott DeFife, Executive Vice President of Policy and Government Affairs for the National Restaurant Association. “Under the current health care law, the definition of seasonal employee versus seasonal worker is inconsistent, complicating the already confusing compliance process especially for smaller restaurant owners and operators. The restaurant industry is an industry of small business with a variable hour and often seasonal workforce. Although well versed in the law, many smaller employers do not understand the difference between the two seasonal definitions included in ACA and the circumstances under which each must be used during the determination process. This leads to significant confusion and could potentially cause great financial burden to employers who believe they are small but in fact are large employers under the law.”
Under the current health care law there are two definitions of seasonal employment– Seasonal Worker and Seasonal Employee. The seasonal worker definition is used when determining if an employer is an “applicable large employer” and subject to the Employer Shared Responsibility and Employer Reporting Requirement. The seasonal employee definition is used by an applicable large employer with the Look-back Measurement Method to determine which employees must be offered coverage.
These conflicting definitions complicate the “applicable large employer” (ALE) determination process. As part of ALE determination, employers must determine all employees’ hours of service, including seasonal workers, each calendar month. They then must calculate the number of full-time equivalent employees per month, and average each month over a full calendar year to determine the employer’s status for the following calendar year. If the employer averaged 50 or more full-time equivalent employees for 120 days or less and the workers that pushed them over 50 were seasonal workers, then the Seasonal Worker Exception applies and the employer can be considered a small employer. The STARS Act technical correction will provide clarification and much needed relief for restaurateurs.
The NRA along with 51 state restaurant associations and other business groups, sent a letter of support for passage of the STARS Act. In the letter the groups write:
“While the regulatory definition of seasonal employee is clear at 6 months, the statute itself still contains the second seasonal worker definition, which leaves more room for interpretation and continues to confuse small employers as they work to comply with the law…By passing STARS, Congress can ensure that small seasonal employers with limited HR capabilities have the tools and understanding necessary to comply with the ACA and to continue to grow their businesses.”
The full text of the letter can be found here.
Founded in 1919, the National Restaurant Association is the leading business association for the restaurant industry, which comprises 990,000 restaurant and foodservice outlets and a workforce of more than 13.5 million employees. We represent the industry in Washington, D.C., and advocate on its behalf. We operate the industry's largest trade show (NRA Show May 16-19, 2015, in Chicago); leading food safety training and certification program (ServSafe); unique career-building high school program (the NRAEF's ProStart); as well as the Kids LiveWell program promoting healthful kids' menu options. For more information, visit Restaurant.org and find us on Twitter @WeRRestaurants, Facebook and YouTube.
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