How is the headcount for full-time equivalent employees calculated during the covered period?
Section 2301(c)(3) of the Cares Act, which deals with employee retention, points to Section 4980H of the Internal Revenue Code to define a full-time employee as one who works on average at least 30 hours a week. Further down in IRC Section 4980H, a full-time equivalent employee is determined by adding the hours of all non-full-time employees during the month and dividing by 120. However, the Cares Act also requires this determination to be made each pay period during the Covered Period. We are currently advising clients to add the total number of hours of non-full time employees and divide by 30, 60, or 120 depending on the pay period (30 if weekly, 60 if bi-weekly, and 120 if monthly). More guidance is needed.