What you need to know about part-time employment benefits

Managing your organization’s workforce can be a daunting task, but many employers find they can save money and enjoy greater flexibility in scheduling when they use part-time workers. These workers can be paid a different amount and offered a benefits package designed for less-than-full-time employees. It’s up to each company to decide what part-time benefits they provide, with part-time benefits law stating that a company’s benefits policy must be clearly defined for all employees, regardless of their part-time or full-time status.

Organizations can improve productivity and overall performance by offering their part-time recruits an inclusive benefits package. Research from the Society for Human Resource Management (SHRM) shows that recruitment effectiveness improved nearly 20% when benefits were provided upfront, and retention rates jumped from 11% to 28%.

Who is a part-time worker?

A standard workweek for a part-time worker is defined by the employer. A part-time employee is an employee who works less than the full-time employees at that company, with each business responsible for determining the appropriate number of hours to set for full- and part-time work within their organization.

Most companies consider part-time to be between 30 and 35 hours a week, but the Bureau of Labor and Statistics (BLM) defines a full-time employee as one working over 34 hours a week. However, federal overtime laws dictate that regular and overtime pay should be calculated based on a standard workweek, which is either 168 consecutive hours or seven 24-hour days in a row.

Part-time employees can be hourly or salaried. Part-time salaried employees in higher-paying positions, such as administrative or executive employees, who earn at least twice the amount of the current federal minimum wage, may be exempt from overtime pay.

When determining the type of part-time employment benefits to offer, take note of all the applicable federal, state and local laws and regulations to ensure your company is in compliance. According to the Fair Labor Standards Act (FLSA), part-time employees are protected by the same labor regulations as full-time workers. Payroll taxes, company policies and minimum wage requirements apply to most U.S. workers regardless of their hours worked per week.

What benefits can a company offer?

Job perks are defined as non monetary compensation and can vary widely, depending on the industry. While each company can choose what tertiary benefits they provide to employees, statutory benefits are federally required for all workers and include:

• Medicare
• Social security
• Family and medical leave
• Unemployment insurance
• Health insurance

It’s completely up to the employer what benefits packages they make available to employees on top of the statutory benefits. Some popular benefits are paid time off, health, dental and vision insurance and retirement plans.

Paid time off (PTO)

Paid time off is time accumulated during working hours at a rate determined by the employer. After an employee has worked enough regular or overtime hours to earn the amount of PTO they need, they receive payment for those days based on their regular wage. This is a great benefit to offer employees because they could feel financially protected in case they fall ill, and some companies choose to let their employees allot their PTO as vacation time.

One emerging trend that may benefit your business is offering parental leave to employees. Under the Family Medical Leave Act (FMLA), employers must allow new parents 12 weeks of unpaid leave, including adoptions, as well as unpaid leave if a family member becomes sick. Some states require companies to provide paid leave in these situations, including:

• Washington
• California
• New Jersey
• New York
• Rhode Island

Providing paid time off to employees to grow their families and in case of health emergencies gives them a safety net, increasing job satisfaction and overall performance. Of employees surveyed with access to PTO, 38% reported being slightly satisfied with their benefits package, and 33% of employees were very satisfied.

Medical, dental and vision

Depending on the size of your organization, part-time employees may or may not have a right to employer-funded health insurance. If a workplace has less than 50 employees, the company isn’t required to offer any health insurance benefit. Smaller companies with less than 25 employees can benefit from tax breaks if they choose to participate in a health insurance program. There are pros and cons to offering health insurance within a small company, so make sure to research what program would be best for your organization.

Larger companies must have health insurance programs for at least 95% of their full-time employees, which is defined as working at least 30 hours a week by the Affordable Care Act (ACA). Employees working less than 30 hours a week aren’t required to be offered insurance. Employees who don’t work enough hours weekly to qualify for employer health insurance can choose a provider from the open market.

Health insurance on the general marketplace does not typically include dental or vision, though this option can often be purchased by employers to offer. Some companies also elect to allow their employees to add their spouses and children to their health insurance.

Retirement plans

New laws require businesses to offer retirement packages to any employee who works a certain amount per year. For example, the SECURE Act allows certain part-time but long-term employees to contribute to a 401k retirement account and gives them the ability to make withdrawals if needed. Furthermore, under the Employee Retirement Income Security Act (ERISA), an employee who works at least 1,000 hours in a calendar year is eligible to contribute to any retirement plan that full-time workers can participate in.

In addition to paid time off and health insurance, there is a range of other employee incentives you could provide:

• Vacation time
• Scholarships and tuition reimbursement
• Subsidized childcare
• Retirement contribution plan, such as 401k
• Pension programs
• Shopping discounts
• Business travel benefits outside of per diem
• Housing and relocation assistance
• The ability to work remotely
• Flexible schedules
• Wellness programs

Attract rockstar candidates when you offer valuable employment benefits

According to market research, enticing benefits packages are more attractive to potential recruits than a higher wage. Employees who have access to job perks such as a flexible schedule and protection for when they are sick or needed by their families are less stressed and overall more satisfied with their careers.

Job perks can vary greatly depending on what industry you’re in. In the retail field, for example, it may be cost-effective for a company to offer a store discount to its employees or even to people related to its employees. This benefit helps attract team members who are passionate about and personally purchase the merchandise they are helping to sell, which in turn produces a stronger, more informed sales team.

Someone who enjoys traveling may want to work for an airline, as they might receive flight discounts. Larger companies such as Google go over the top with their benefits packages, including services such as massages and gourmet chefs in the lunchroom. In addition to a standard health insurance and retirement plan option, employees at Twitter receive improv lessons and acupuncture in their benefits packages.

When looking for part-time employees, it’s important to ask what benefits you want to provide that would make sense to your company and give incentives to your employees. You can research companies that interest you and see what part-time employee benefits information you can find on their website or through online reviews. Check out companies that are known to offer benefits and take note of their part-time employee benefits packages to attract the caliber of employees you need for your growing business. For example, Costco offers Employee Stock Ownership Plans (ESOPs) on top of an all-inclusive benefits package.

Job satisfaction improves when part-time benefits are offered

Satisfied employees are generally more productive, flexible and happy to be at work. 92% of employees report a good benefits package as a factor in their overall job satisfaction. A 2016 study from the Society for Human Resource Management (SHRM) shows overall job satisfaction improves when any additional benefits are offered, but some benefits are more valuable than others. The top benefits cited as improving overall satisfaction were paid time off (PTO) and health insurance.

Other benefits can be nearly as valuable as PTO, such as defined contribution plans like the 401k or 403k. According to the 2016 SHRM study, 65% of employees offered this benefit cite overall satisfaction. Family-minded employees report higher levels of job satisfaction when benefits such as domestic partnership benefits, tuition assistance or scholarships and subsidized childcare, with 57% of employees reporting being satisfied with this perk in their benefits package. While pensions are less common than in previous years, 51% of employees offered a pension report being happy to utilize this benefit. Of the benefits measures, wellness packages are the least popular, with only 21% of participants reporting satisfaction with the program.

Whether you have a large full-time staff with a schedule that needs occasional supplementing by part-time workers or you want to offer your smaller team a more flexible schedule, part-time workers make a valuable addition to any workplace. There are many perks to providing a safety net and enticing benefits to your part-time workers, including overall improved company success.