[Code of Federal Regulations]
[Title 13, Volume 1]
[Revised as of January 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 13CFR121.106]

[Page 289]
 
                TITLE 13--BUSINESS CREDIT AND ASSISTANCE
 
                CHAPTER I--SMALL BUSINESS ADMINISTRATION
 
PART 121--SMALL BUSINESS SIZE REGULATIONS--Table of Contents
 
          Subpart A--Size Eligibility Provisions and Standards
 
Sec. 121.106  How does SBA calculate number of employees?

    (a) In determining a concern's number of employees, SBA counts all 
individuals employed on a full-time, part-time, or other basis. This 
includes employees obtained from a temporary employee agency, 
professional employee organization or leasing concern. SBA will consider 
the totality of the circumstances, including criteria used by the IRS 
for Federal income tax purposes, in determining whether individuals are 
employees of a concern. Volunteers (i.e., individuals who receive no 
compensation, including no in-kind compensation, for work performed) are 
not considered employees.
    (b) Where the size standard is number of employees, the method for 
determining a concern's size includes the following principles:
    (1) The average number of employees of the concern is used 
(including the employees of its domestic and foreign affiliates) based 
upon numbers of employees for each of the pay periods for the preceding 
completed 12 calendar months.
    (2) Part-time and temporary employees are counted the same as full-
time employees.
    (3) If a concern has not been in business for 12 months, the average 
number of employees is used for each of the pay periods during which it 
has been in business.
    (4)(i) The average number of employees of a business concern with 
affiliates is calculated by adding the average number of employees of 
the business concern with the average number of employees of each 
affiliate. If a concern has acquired an affiliate or been acquired as an 
affiliate during the applicable period of measurement or before the date 
on which it self-certified as small, the employees counted in 
determining size status include the employees of the acquired or 
acquiring concern. Furthermore, this aggregation applies for the entire 
period of measurement, not just the period after the affiliation arose.
    (ii) The employees of a former affiliate are not counted if 
affiliation ceased before the date used for determining size. This 
exclusion of employees of a former affiliate applies during the entire 
period of measurement, rather than only for the period after which 
affiliation ceased.

[61 FR 3286, Jan. 31, 1996, as amended at 69 FR 29203, May 21, 2004]