An employee can make a huge difference in your business. They can speed up operations, come up with innovative ideas, and free up your time. When you hire a full-time employee, it’s important to offer attractive benefits in their compensation package. Do part-time employees get benefits, too?
What is a part-time employee?
Before determining part-time employee benefits, you need to know what a part-time employee is. This can be tricky.
You might think that a full-time employee is someone who works 40 hours in the workweek. But, this is not always the case. There is actually no clear-cut definition for the difference between part-time and full-time employees.
Employees who work an average of at least 30 hours per week, or 130 hours per month, can be considered full-time, according to the IRS. For the purpose of the Affordable Care Act (ACA), the IRS acknowledges these hours. According to the IRS, full-time employment ranges from 30-40+ hours per week.
Part-time employees could be those who work less than 30 hours a week, under the IRS definition. Or, they could be employees who work between one and 34 hours in a week, like the U.S. Bureau of Labor Statistics (BLS) says.
|Source||Part-time Definition||Full-time Definition|
|IRS||Less than 30 hours per week||30 or more hours per week|
|BLS||1 – 34 hours per week||More than 34 hours per week|
Basically, as the employer, the difference between a full-time and part-time worker depends on your business’s policies, location, and size.
If an employee works 34 hours, for example (right on the cusp of these definitions), they could be part-time or full-time. You might decide that full-time employees are those who work 37 or more hours a week. Or, you could decide that full-time employees are those who work 30 or more hours per week.
What are benefits?
A benefit is non-wage compensation employers offer employees in addition to regular wages. This increases the value of an employee’s overall compensation package.
As an employer, there are many different types of small business employee benefits you can offer. You might be required to offer some benefits, depending on factors like business location and size. Here are a few popular ones:
- Health, dental, and vision insurance
- Retirement plans for employees
- Workers compensation
- Unemployment insurance
- Disability insurance
- Life insurance
- Paid time off
- Tuition/educational assistance
- Flexible work schedules
Do part-time employees get benefits?
The Fair Labor Standards Act (FLSA) does not say whether part-time employees should get the same benefits as full-time employees. In most cases, employers are able to determine which benefits (insurance, paid time off, retirement plans) to offer part-time employees, as well as requirements (i.e., length of time with company) for receiving them.
It can get overwhelming deciding what benefits to include at your small business. Create a standard policy that says who is eligible for benefits and when their eligibility begins. You can include the policy in your employee handbook.
You are in charge of your policy. In your policy, include information about the different benefits you offer. And, address how long the employee needs to work before receiving each benefit. Define what a full-time employee is, and define what a part-time worker is. Talk about benefits for part-time employees as well as full-time employee benefits.
Regardless of what you choose to offer, make sure you are clear and address all possible questions in your policy.
Are part-time employees eligible for health insurance?
If you have 50 or more full-time equivalent employees at your small business, you are required to offer health coverage.
However, you are not required to provide health insurance to your part-time employees, according to HealthCare.gov. But, you can choose to offer part-time employees health insurance if you want.
Do part-time employees get vacation?
Whether you give paid vacation days to any employee is up to you. If you offer full-time employees paid time off, you don’t have to offer it to part-time employees. But, you can if you want to.
You can decide how many days of paid vacation full-time and part-time employees receive. Maybe, you offer your full-time employees 16 days of paid time off and eight days to part-time workers.
If you don’t offer paid vacation to employees, you can still give them unpaid vacation days.
Do part-time employees get holiday pay?
Holiday pay is not mandatory for any employee. If you decide to offer paid holidays to full-time employees, you might consider extending holiday pay for part-time employees as well. Again, this will depend on the policy you create.
Maybe you choose to offer less holiday pay for part-time employees than full-time employees. For example, you give holiday pay for half a day to your part-time employee and a full day of holiday pay to your full-time employee.
Advantages of offering benefits to part-time employees
Typically, you aren’t required to offer benefits to your employees. But, most employers do.
According to the BLS, 66% of all employees have access to retirement plans, 67% have access to medical care, and 55% have access to life insurance. Offering benefits is a great way to attract and retain employees.
When you extend certain benefits to part-time employees, you might boost employee morale. Part-time employees might feel valued and willing to stay at your business. If you offer a full-time position to them, the part-time employee might be more inclined to accept.
You must adopt a benefits policy for your small business. Let’s take a look at a basic example of a policy.
You offer paid time off, health insurance, and a 401(k) plan at your small business. You must define who is eligible for the benefits and when.
Here is a bare-bones example of what your policy would look like:
- Definition of employment: Full-time employees are those who work 40 hours per week. Part-time employees are those who work less than 40 hours per week.
- Paid time off (PTO): Full-time employees receive 20 days of PTO after working 60 days. Part-time employees working at least 25 hours per week are eligible for a proportionate amount of paid time off after working 60 days.
- Health insurance: Both full-time and part-time employees working at least 25 hours per week are eligible for health insurance after a 60-day waiting period.
- 401(k) plan: Both full-time and part-time employees are eligible to open a 401(k) plan after working for six months.
Need a simple way to make your policy accessible? With Patriot’s online HR Software add-on, you can store your employee handbook and important documents online, like benefits information. That way, your employees have instant access to your policies. And, it integrates seamlessly with our payroll software. Try both for free today!
This article has been updated from its original publication date of August 2, 2017.This is not intended as legal advice; for more information, please click here.