Affordable Care Act Checkup: 2014 Payroll

This past summer, the Obama administration decided to delay the "employer shared responsibility" portion (also known as the "employer mandate" or "pay or play mandate") of the Affordable Care Act (the "ACA") for one year until January 1, 2015. This delay, while welcome, has lulled many employers into a false sense of security; many assume that not much needs to be done in 2013 or 2014 to get ready for 2015.  In our view, nothing could be further from the truth.

Among other things, one thing that employers should be doing now is setting up payroll systems to track and record employees' work hours starting in 2014. These records will serve two important purposes under the ACA.

• First, An employer will be able to prove to the IRS whether it is or is not an "applicable large employer" subject to the employer mandate. An employer is an "applicable large employer" for a calendar year if it employed an average of at least 50 full time and full time equivalent employees