Tis the Season to Be (Not) Hiring

The annual holiday blitz is about to hit retailers. In fact, some big name stores will start Thanksgiving sales right after their back-to-school specials. (Halloween doesn’t provide the same bang for the buck apparently.) This fact combined with the new PPACA regulations imposes a significant question upon many small business owners, “Should they hire seasonal workers or bite the bullet and struggle with fewer full-time employees?”

The PPACA and Part-Timers

The new PPACA has a wealth of provisions that pertain to any company with more than 50 full-time employees. Many of these provisions, due to their exorbitant costs, will encourage employers to limit the number of full-timers and increase their number of seasonal employees. Still, a company may be penalized for non-compliance for a variety of other reasons. In any case, tracking and documenting seasonal and part-time employees as opposed to full-timers will soon become an administrative nightmare.

An Uncertain Future

While it may seem self-evident to many small business owners that they should be able to hire and fire at will during the holiday season, the current administration of the United States seems to disagree. Prudence would dictate that small business owners, on the cusp with close to 50 employees, should keep a careful eye on the definition of a “Full Time Equivalent (FTE)” employee. The government intends to issue guidelines to clarify what constitutes an FTE but as for now, the criteria does not exist.

The Recent Microsoft Ruling

As a further case in point, one should examine the plight of the vaunted Microsoft company. Even before the advent of PPACA and despite an army of lawyers and what would seem to be justice on their side, Microsoft was penalized for categorizing many of their employees as “part-time” when the government argued, successfully, that they were actually “full-time.” 

The repercussions of this decision affect every company in the United States. While Microsoft is expected to exhaust every appeal, the writing seems to be on the wall: calling an employee temporary doesn’t actually make it so.

An HRIS Solution

Some, the government included, would argue that Microsoft knowingly paid full FTE employees as part-timers to save on the costs of benefits. Certainly, Microsoft had the infrastructure and computer savvy to correctly track their employees. The question for the small business owner is whether or not there is an affordable solution for his company to avoid the same fate.

Fortunately, the answer is yes. An HRIS solution can be designed to properly categorize current employees and new hires and to warn of any potentially problematic issues. Software can easily and affordably track the factors that determine FTE status and calculate this status for you. A company can then more accurately determine its payroll needs and costs.

An HRIS provides other benefits as well. An integrated system can track payroll, training, benefits and employee reviews. The HR staff, management and the employees, themselves, can access particular parts of the system in the office or over the Internet. In short, an HRIS allows you to automating the most routine aspects of HR functions and allows the small business owner and his team to concentrate on larger issues such as PPACA and the role of FTE employees.

About the Author

Carolyn Sokol writes about issues that may affect small businesses such as human resources, hr management software, and HRIS programs.  She is founder of PEOcompare.com and contributor to compareHRIS.com, both of which help match businesses to the right HR or payroll service provider for their particular needs. Her background is in marketing and communications, employee education and training, development of policies and procedures and the ongoing delivery of outstanding customer service.