[Code of Federal Regulations]

[Title 13, Volume 1]

[Revised as of January 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 13CFR121.106]



[Page 294]

 

                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]