Denver Staffing Agency - ACA FAQs 5 of 8 – Oct. 9, 2013

  • Posted by: J. Kent Gervasini |
  • 10/17/13 |
  • 12:02 AM
Denver Staffing Agency - ACA FAQs 5 of 8 – Oct. 9, 2013

The Affordable Care Act (ACA) imposes major new legal obligations on employers, including new excise taxes, which will increase the cost of supplying temporary and contract workers. The staffing industry is committed to compliance with the ACA, and the American Staffing Association (ASA) is actively working to help staffing firms and clients understand the rules and how they will affect staffing services. These answers to frequently asked questions are designed to help staffing professionals understand the basic ACA requirements and compliance issues.

FAQ 5. What if the Staffing Arrangement Causes a Client’s Headcount to Fall Below 50?

There are no bright line answers to this question because the employer regulations have not been finalized and, apart from the abuse situations described in FAQ 4, the government has issued little enforcement guidance.

The proposed regulations, however, suggest that the answer will largely
depend on whether the primary purpose of the staffing arrangement
is to avoid the ACA employer coverage or tax obligations.


Businesses have a right to decide whether and when to outsource portions of their work force—or how many full-time employees they need—based on legitimate business and economic reasons: for example, meeting fluctuating demand for goods and services, staffing special projects, and managing high-turnover operations. Therefore, staffing services used by clients for such reasons should generally be ACA compliant even if the client’s headcount is incidentally affected. But if the primary purpose is to avoid the ACA employer coverage or tax obligations, the arrangement may come under scrutiny and the client held to be the responsible employer.

Source: American Staffing Association, Oct. 9, 2013

The information in the article above is intended for general education purposes only and should not be relied upon as a substitute for professional, legal, accounting, medical and/or insurance advice.

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