Part-time employees can offer extra help at a lower cost to the employer than full-time workers. Companies might also hire part-time employees because they need workers with flexible hours such as at night or on weekends. If you’re thinking about hiring a part-time employee, you may be surprised to learn that many of the obligations you have to your full-time employees under federal law also apply to your part-time employees. 

What Makes an Employee Part-Time?

The federal Fair Labor Standards Act establishes minimum wage, overtime pay, recordkeeping, and child labor standards for both full-time and part-time workers, but does not define either full-time employment or part-time employment.  According to the U.S. Department of Labor, this is a matter generally to be determined by the employer. (Your state may define a part-time worker for purposes of applying its own laws, so before you hire a part-time worker it is wise to check with an attorney knowledgeable in your state’s laws, as well as with your state labor office, to be sure you understand what your state requires.)

Benefits for Part-Time Employees

There is no federal requirement that employers offer fringe benefits like vacation or holiday pay, sick leave, personal time off, bonuses, severance pay or retirement plans to theirpart-time employees employees. Additionally, under current federal law, there is no requirement that employers offer health coverage to their workers.

 

Employers may generally determine the eligibility rules for these types of employee benefits and may, in certain instances, choose to offer different benefits to different employee groups (such as full-time and part-time employees) as long as the basis for these differences is not discriminatory.

 

Some federal laws, however, require that certain benefits be provided to all employees as long as the employees meet certain eligibility requirements. For example:

  • Under the Employee Retirement Income Security Act, a company that offers pension or retirement benefits is generally required to allow those who work 1,000 hours per year or more to participate in the plan.
  • The Family and Medical Leave Act provides that employees are eligible for certain unpaid leave benefits if they have worked for their employer at least 1,250 hours over the past 12 months and work at a location where the company employs 50 or more employees within 75 miles.
  • In general, the Federal-State Unemployment Insurance Program provides unemployment benefits to eligible workers who are unemployed through no fault of their own (as determined under state law), and meet other eligibility requirements of state law.
  • The Uniformed Services Employment and Reemployment Rights Act (USERRA) covers nearly all employees, including part-time employees, and generally requires employers to reemploy servicemembers returning from a period of service in the uniformed services if those servicemembers meet certain criteria. USERRA also prohibits employment discrimination against a person on the basis of past military service, current military obligations, or intent to serve.

 

Additionally, businesses with employees are generally required to carry workers’ compensation insurance coverage through a commercial carrier, on a self-insured basis, or through a state workers' compensation insurance program. Visit your state's agency to find out more about workers’ compensation coverage.

Other Federal Laws Affecting Part-Time Employees

In addition to the benefits required by federal law noted above, other federal laws may impose additional obligations on employers, whether their employees are full- or part-time, including:

 

  • Federal Payroll Deductions: According to the Internal Revenue Service, for federal income tax withholding and social security, Medicare, and federal unemployment tax purposes, there are no differences among full-time employees, part-time employees, and employees hired for short periods.
  • Discrimination: Under the laws enforced by the U.S. Equal Employment Opportunity Commission (EEOC), it is illegal to discriminate against someone (an applicant or employee) because of that person's race, color, religion, sex (including pregnancy), national origin, age (40 or older), disability or genetic information. An employer must have a certain number of employees to be covered by these laws, and, according to the EEOC, all employees, including part-time and temporary workers, are counted for purposes of determining whether an employer has a sufficient number of employees.
  • Safety and Health Protection: Under the Occupational Safety and Health Act, employers are responsible for providing a safe and healthful workplace for their employees. The law requires employers to provide their employees with working conditions that are free of known dangers. Most employees in the nation come under the jurisdiction of the U.S. Occupational Safety and Health Administration (OSHA), either directly or through an OSHA-approved state program.

And Remember…

Disputes may arise if employers and employees understand benefits policies differently. In order to avoid such disputes, employers should establish clear, written policies defining what constitutes full- and part-time employment and the effect of each status on eligibility for benefits. Additionally, if there is any question as to whether a particular employee is entitled to benefits, the employer should consult with knowledgeable employment law counsel.

 

For more information on offering benefits to your employees, check out our section on Eligibility for Benefits. And for even more help managing your employee benefit plans, download our free 2012 Employee Benefit Plan Compliance Calendar.


Image credit: Victor1558

Topics: Employee Benefits, Human Resources

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