What is a Variable Hour Employee in Your Industry?

July 29, 2024 | Staffing Blog

In the modern employment landscape, the concept of a variable hour employee has become increasingly relevant. If your company regularly utilizes talent on a temporary or short-term basis to fill key needs, you may have questions like, “What is a variable hour employee in my industry?”

Overall, these individuals’ work hours do not consistently meet the full-time or part-time status each month. The IRS has specific guidelines for identifying and managing such employees, especially in relation to compliance with the Affordable Care Act (ACA).

Employers need to carefully navigate these regulations to avoid penalties and ensure they are providing adequate benefits to individuals. Learn how to support compliance in your industry.

Navigating IRS Standards: How Variable Hour Status is Determined

Let’s start with the basics of how to classify part-time employees. To determine whether an employee qualifies as a variable hour employee, employers must consider several critical IRS-defined periods.

• Initial Measurement Period: Typically lasting between 3 to 12 months, during the standard measurement period, employers monitor the hours worked by new hires. If they worked on average at least 30 hours per week, this would classify them as full-time status under ACA guidelines.

• Stability Period: If an employee averages 30 hours per week during the initial measurement, they are treated as full-time employees for a subsequent stability period. This period must be at least as long as the measurement period but not shorter than six months. This determination holds regardless of their actual hours worked during the stability period.

• Administration Period: This period, which cannot exceed 90 days, is the time allowed for employers to handle the administrative duties associated with enrolling employees in health plans or changing their employment status based on the hours they worked during the initial measurement period.

What Is a Variable Hour Employee in These Industries? 

As you can see, the ACA requires employers to meet specific standards when determining the hours of service for each worker. Let’s take a closer look at how these standards apply to situations in prominent industries where we staff talent.

Warehouse Industry

In the warehouse industry, staffing needs can dramatically shift due to factors like seasonal demand, supply chain disruptions, or changing consumer behaviors. Many warehouse workers, therefore, fall into the variable hour category as their hours shift in response to these variables.

Light Manufacturing

Employees in light manufacturing may face variable hours because of the cyclical nature of product demands. During new product launches or special promotions, hours might increase, only to decrease once the demand stabilizes. Keeping track of these changes is critical for properly measuring each individual’s working hours.

Clerical Work

Project-based scheduling may lead to clerical positions fluctuating with business needs. During periods of high activity – such as tax season or end-of-year reporting – clerical workers may temporarily work full-time hours, shifting back as demands decrease. Employers must take a proactive approach to stay on top of these adjustments.

Hospitality

Seasonal peaks and troughs are prevalent in hospitality, making the hospitality sector particularly prone to variations in staffing. Hotels, restaurants, resorts, and tourism-related services often adjust their workforce based on seasonal tourist influxes, with staff hours increasing during peak seasons and decreasing in the off-season.

We recommend preparing in advance for expected seasonal fluctuations. For example, if your peak season is during the summer, spend the spring season mapping out expected work hours for each seasonal worker so that you can anticipate potential issues ahead of time.

Healthcare

In healthcare, staffing requirements are directly tied to patient needs. And, you need to ensure that you can provide continuous patient care amidst fluctuating needs. For instance, more staff might be necessary during flu season or a local outbreak, often leading to variable hours for nurses and support personnel.

You will want to stay on top of any sudden changes so that a part-time nurse suddenly doesn’t qualify as a full-time employee if asked to work more hours than usual.

Partner with Allegiance Staffing for Your Variable Hour Staffing Needs

Managing variable hour employees can become complex when dealing with the intricacies of labor laws and government compliance. Allegiance Staffing provides expertise in navigating these challenges. We offer flexible staffing solutions that ensure you have the right personnel on hand – exactly when needed – with less administrative burden.

Our experts are ready to help you optimize your workforce for maximum efficiency and compliance. With our support, you can adeptly manage variable hour employees, adapting swiftly to business needs while upholding all regulatory requirements.

Understanding what is a variable hour employee in your specific situation will allow you to maintain a flexible and responsive workforce – while remaining in compliance with regulations. This adaptability is crucial for meeting changes in today’s fast-paced business environment.

Our team is ready to elevate your operating reality and contribute to sustained operational success. Contact us today to discuss how we can partner with you to support your temporary staffing needs.