The Payroll Blog
News, tips, and advice for small business owners
Sample Paycheck and Payroll Pay Stub Example
As a small business owner, you know that benefits are important to your employees. However, when it comes to part-time employees, things can get confusing, as there are minimal federal regulations on benefits for part-time employees.
If you’re wondering who is considered part-time and the benefits you should offer these workers, we’re here to help clear up your questions.
What is Considered Part-Time?
You know that there are specifics behind exempt and non-exempt employees, but what are the differences between full-time and part-time workers? The short version is, part-time employees work fewer hours than full-time employees, but the specifics of those hours tend to fall in the hands of business owners. A common practice is that part-time employees will work a minimum of 20 hours per week and no more than 35. Since the Fair Labor Standards Act (FLSA) does not outline specific requirements, a small business owner can choose the hours that work for their business.
Benefits for Part-Time Employees
Depending on the state you live in, some benefits such as workers’ compensation insurance, Social Security or short-term disability insurance may be required, while others such as health insurance, retirement plans or fringe benefits may be up to you to decide. It’s important to consider that even if they’re not required, offering some employee benefits can boost employee engagement or be key in attracting new talent. Five common employee benefits to consider for part-time workers are:
- Health insurance. The Affordable Care Act does not require employers with less than 50 employees to provide health insurance, but it’s definitely a benefit that employees appreciate receiving. A common requirement to receive health insurance is for employees to work a minimum of 20 hours per week, which could impact your part-time workers. Eligibility will depend on federal and individual state laws, the insurance provider, and other factors. When deciding to offer health insurance to part-time workers, first check with your provider to understand if there are any additional requirements to follow.
- Retirement plans. Offering 401(k) benefits to your employees shows that you are invested in their future. Similar to offering health insurance to part-time employees, there may be requirements for minimum hours worked for these employees to be eligible for retirement benefits. The Employee Retirement Income Security Act (ERISA) sets minimum standards that you’ll need to be aware of.
- Unemployment benefits. Offering unemployment benefits depends on a variety of factors, including state regulations, the hours worked in a year, wages earned during a certain time period, and how employment ended (meaning if the employee was laid off, fired, or quit). To determine your requirements as a small business owner, check the rules for your state first as set by the Department of Labor.
- Overtime laws. If your part-time employee is classified as non-exempt, they would possibly be eligible for overtime pay. There may be times that your business hits a busy season and you may need all hands on deck. The FLSA mandates that overtime pay is one and one-half times the regular rate for all hours worked over 40 in a week. If your part-time employees receive an hourly wage of $10, their overtime wage would be $15 per hour.
- Fringe benefits. While the majority of the previously mentioned benefits depend on factors such as hours worked, when it comes to fringe benefits, you have more flexibility in what you choose to offer part-time employees. Things like paid time off, including vacation and sick days, work from home opportunities, or health and wellness stipends, are benefits that you can control.
There is no downside to offering benefits to your part-time employees. While there are certain requirements to follow, you overall have the option to set the rules for your small business part-time employees.
Related Blog Posts
View Our Plans and Pricing
Small Business Is Our Business.
This website contains articles posted for informational and educational value. SurePayroll is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, SurePayroll. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant. If you require legal or accounting advice or need other professional assistance, you should always consult your licensed attorney, accountant or other tax professional to discuss your particular facts, circumstances and business needs.