Health Reform Questions: Applying Employment Breaks for Schools
Provided by Larry Grudzien
Question: A local school district hires Mary, a long-time substitute, to be a substitute for Jane during Jane’s six week maternity leave and, during that period, credits Mary with 280 hours of service. Jane then returns and Mary is off work for ten weeks. At the end of those ten weeks, the district looks back and measures its part-time and variable hour employees to determine whom it must treat as full-time during the associated stability period. Mary averaged just 10.77 weekly hours during the measurement period. How could she be considered full-time?
Answer: Under in 26 CFR § 54.4980H-1(a)(17), the term employment break period means a period of at least four consecutive weeks (disregarding special unpaid leave), measured in weeks, during which an employee of an educational organization is not credited with hours of service for an applicable large employer.
Does this definition only apply just to about summer breaks?
No. Because Mary’s ten weeks off work fell short of twenty-six consecutive weeks, the district could not treat Mary as a new hire upon resumption of services in week eleven under 26 CFR § 54.4980H-3(d)(6)(ii)(A).
In determining Mary’s average weekly hours of service during the measurement period, 26 CFR § 54.4980H-3(d)(6)(ii)(B) provides that the hours of service averaging rule must be used in calculating Mary’s total hours during the measurement period.
This rule provides:
[A]n educational organization employer determines the employee’s average hours of service for a measurement period by computing the average after excluding any special unpaid leave and any employment break period during the measurement period. Alternatively . . . the employer may choose to treat the employee as credited with hours of service for any periods of special unpaid leave and any employment break period during that measurement period at a rate equal to the average weekly rate at which the employee was credited with hours of service during the weeks in the measurement period that are not part of the period of special unpaid leave or an employment break period. Notwithstanding the preceding two sentences, no more than 501 hours of service during employment break periods in a calendar year are required to be excluded (under the first sentence) or credited (under the second sentence) by an educational organization, provided that this 501-hour limit does not apply to . . . special unpaid leave.
In applying the above rule. it seems that only substitutes needing more than 501 hours of measurement period boost will fall short of full-time status. If the District used a six month measurement period, a substitute would only need to 780 hours to be full time (130 hours times six months).
With the application of employment break rule, Mary would only have to work 280 hours during the measurement period to be a full-time employee. Under this special employment break rule, Mary would be credited with 501 additional hours.