Many small businesses rely heavily on part-time workers, but now having one too many part-time workers could make some small businesses subject to large penalties. The healthcare reform law states that “employers have to offer affordable health insurance to full-time workers or pay a penalty of up to $3,000 per worker, starting in 2014.” Businesses with fifty or fewer workers are exempt from the penalties.

A company’s worker total is determined by combining both full-time and full-time equivalent workers (FTEs), and this is where it starts to get tricky for small businesses. Every 120 part-time hours worked per month equals one Full Time Equivalent worker, no matter how many employees work those 120 hours. For example, if your business has ten part-time employees that work a total of 480 hours in one month, that is equal to four FTE workers. If your business has at least 46 full-time workers, and then have to add the four extra FTE workers to that, your business now has a total of fifty full-time workers. Which means your business would have to offer health insurance to workers or risk facing the $3,000 per full-time worker penalty.

This means that small businesses, such as retail stores and restaurants, who tend to have a high number of part-time workers need to keep close track of the number of hours being worked by part-time employees. For more information read this article. HR Made Simple Users can log in to access additional materials.