Should Part-Timers Get Benefits?

What is the minimum number of hours an employee must work per week to be considered a full-time employee? How does this impact benefits, especially employer-paid health insurance?

Part-time status is determined solely by the employer. Generally speaking, most employers treat a regular work schedule of 35 hours or more as full time. But many employers say anything less than a 40-hour regular schedule is part time. Therefore, the employer could choose to make 39 hours per week part time.

Many employers opt to give prorated benefits to part-timers who work 20 hours or more per week. But the decision is up to the employer. Your benefit policies and the terms of any third-party contracts (such as your health-insurance carrier) determine whether your part-timers will get benefits such as health-care coverage premium payments, vacation, and sick time.

However, once you put a policy in place, certain requirements attach. Also, watch out for pension and retirement plans covered by the Employee Retirement Income Security Act (ERISA). Such programs legally require coverage of employees with 1,000 hours of service in a given period (for example, 1,000 hours in a 12-month period).

Certain federally mandated benefits, such as COBRA, FMLA, workers' compensation, unemployment compensation, and Social Security, cover all employees on your payroll, regardless of how many hours they're regularly scheduled to work. These benefits are based on other more complex factors such as the size of your company.