Weekly Equivalency Method

Because most companies do not track the hours of their salaried employees, Zenefits uses the weekly equivalency method, which assumes 40 hours of service for each week in which a salaried employee has at least one hour of service.

How the Weekly Equivalency Method Works

Multiplying 40 by 52 weeks, this comes out to 2080 hours in a year. Dividing 2080 by 12 months returns 173.333, or roughly 173 hours per month. Under the weekly equivalency method, Zenefits uses 173 hours as the estimated number of hours worked per month for each salaried employee. Based on this assumption, all of an employer's salaried employees will likely be “full-time” eligible, and the company will be required to offer them coverage.

Weekly Equivalency Method and Part-Time or Temporary Employees

Because the same weekly equivalency method is used for all salaried employees, regardless of their full-time, part-time, or temporary status, Zenefits automatically assumes 173 hours per month. This means that all salaried employees, by default, will become “full-time” qualified and eligible for coverage.

If an admin needs to adjust hours for their salaried part-time or temporary employees because they actually worked less than 173 hours per month, they can do so manually within the ACA Compliance app.