01/17/2024

Know What Benefits to Offer Part-time Employees

Benefit requirements vary from one organization to the next

Many small businesses rely on part-time employees to help them operate efficiently. They don't require full-time employees, at least not for all positions. According to the U.S. Bureau of Labor Statistics, there were more than 27 million part-timers in the third quarter of 2023. Federal laws may require you to offer some benefits and you may choose to offer others. Here is what you need to know.

Overview of part-timers

Who is a part-timer? It used to be up to employers to fix this status based on the number of hours worked, with many setting a minimum of 20 hours per week as the schedule for part-timers. The Fair Labor Standards Act (FLSA), which is the law governing minimum wage and overtime rules, doesn’t have a set standard, but overtime rules don’t apply until an employee works more than 40 hours in a workweek. The Bureau of Labor Statistics refers to part-timers as those working one to 34 hours per week. Part-timers have always been included in figuring your workers compensation and unemployment tax. But now various federal laws refer to part-time workers and require employers to take them into account.

Medical coverage

Under the Affordable Care Act (ACA), the employer mandate requires applicable large employers (ALE) to offer health coverage or pay a penalty. An ALE is an employer with at least 50 full-time and full-time equivalent employees. Thus, in making the determination of whether a business is subject to the employer mandate, part-timers must be counted.

Please select this link to read the complete article from Big Ideas for Small Business.