Affordable Care Act Influences Wage Policy
The Commonwealth of Virginia has adopted a provision in the 2013 Appropriation Act that limits all state wage employees to working no more than 29 hours per week, on average, over the course of 12 months (52 weeks). According to the Department of Human Resource Management (DHRM), the amendment is necessary to ensure compliance with the Patient Protection and Affordable Care Act (PPACA), commonly called the Affordable Care Act, for which a majority of the law takes effect in 2014. As indicated by DHRM, the state health plan currently does not permit participation by wage employees.
Under the Affordable Care Act, employers must identify a “look back” period (measurement period) in order to determine which employees will meet the Act’s definition of “full-time employee”, and must be offered healthcare coverage in order to avoid significant tax penalties. The Commonwealth of Virginia has determined the time period to be May 1 through April 30 of the following year.
Therefore, effective May 1, 2013, all wage employee work hours must be counted on the basis of the 12-month period beginning May 1 through April 30 for both the 29 hour per week average and the maximum 1500-hour limit. In addition:
In order to assist supervisors with managing the 29 hour wage average during the measurement period, Human Resources will provide the cumulative, weekly average for wage hours worked year-to-date through the most recent pay period. Information will be sent to supervisors beginning June 2013.
FAQ’s 29 hour per week average and the maximum 1500-hour limit
1.) What is the “Standard Measurement Period” that employers are required to designate? Under the Affordable Care Act, employers must identify a retroactive measurement, or “look back” period, in order to determine which employees will meet the Act’s definition of “full-time” employee, and must be offered healthcare coverage in order to avoid significant tax penalties. The Commonwealth of Virginia has determined the time period to be May 1 through April 30 of the following year. The initial Standard Measurement Period is May 1, 2013 through April 30, 2014.
2.) Why is it necessary to limit the number of hours that wage employee are permitted to work? The amendment is necessary to ensure compliance with the Affordable Care Act. Providing health insurance to wage employees would require a significant expenditure of state funds that are not budgeted.
3.) What if I want to offer my wage employee health insurance? The state health plan does not permit participation by wage employees.
4.) Who is responsible for tracking my wage employee’s hours? How will I know they are within the average 29 hours per week? The supervisor and the employee are responsible for planning, scheduling and tracking wage hours. In addition, HR will send wage reports via email to supervisors of wage employees to assist with monitoring the average of 29 hours per week. The initial report will be sent in June.
5.) Are there any exemptions to the amendment? No.
6.) What happens to the hours I worked prior to May 1? The hours you worked prior to May 1 are not included in the 29 average per week calculations.
7.) If a wage employee is hired September 10, will their date for calculating their weekly average still be May 1? Yes. The Standard Measurement Period will still be used to calculate the weekly average. The employee will still need to maintain an average of 29 hours per week over 52 weeks.
8.) If I offer a position mid-year, can my wage employee work more than 29 hours per week since they will not reach an average of 29 hours over 52 weeks? Yes, but your wage employee must maintain an average of 29 hours per week over the 52 week period. Wage employee schedules may vary from week to week provided that the average number of hours worked over the course of twelve months does not exceed 29 hours per week.
9.) What happens if the report shows my employee is averaging more than 29 hours per week? The supervisor must decrease hours immediately to reduce the weekly average over the remainder of the Standard Measurement Period.
10.) What happens if my employee works overtime (more than 40 hours in one workweek), are the hours over 40 included in the 29 hours per average per week? If so, how are they calculated? Yes. Each hour worked over 40 hours during overtime will be counted toward the 29 average per week. For example, a wage employee works 44 hours during the workweek. While the employee gets paid time-and-a-half for the extra 4 hours, all 44 hours will be counted towards the 29 per week average.
11.) How does resetting hours to May 1 affect my eligibility for tuition waivers or future wage increases? The change to May 1 does not affect eligibility requirements regarding wage employee tuition waivers or future wage increases. See Policies 1402, 1405, 1325, and Part VI of the Salary Administration Plan.
12.) Are student and post-doctoral workers in wage positions at colleges and universities subject to the 29 hour restriction? Yes
13.) Can a wage employee still be employed in two or more wage positions on campus? Yes, however all concurrent wage position hours count towards the 29 hour per week average as well as the 1500-hour limit. Careful planning and scheduling should be a priority to avoid exceeding the limit.
Please contact your Workforce Management Representative in Human Resources or contact Human Resources at 540-568-3597.