These may seem like easy questions to answer but in reality they aren’t because there are no universal answers; it really depends on who you ask and what you are asking about.
Typically, employers set the standards for their workforce and define what a full time and a part time employee is in their company handbook. A 40 hour work week is most common but we also see that a full time work week can range from 35 to 45 hours per week. Employers may also define what full time and part time employees are eligible to participate in and what benefits they will receive. It’s important to understand that even though the employer has the ability to set policy at their work site, governing bodies, laws and insurance companies may define employees differently for certain benefits.
Some examples to consider:
Fair Labor Standards Act – This federal law defines a full time employee as one who works 40 hours per week and the law requires that employers pay non-exempt employees covered by the act overtime for hours worked in excess of 40 hours at least 1 ½ times their regular pay.
Health Insurers – Health insurers, as part of the eligibility process, may only allow full time employees access to their plan offering. Full time to the insurance company may mean 30 hours per week so even if your business defines full time as 40 hours, employees working 30 hours per week must be allowed to participate in the health insurance plan.
Full Time Employees Under the Affordable Health Care Act – An employee who averages 30 or more hours per week is considered a full-time employee. An employee who averages fewer than 30 hours per week is counted as a partial employee; these partial employees are then combined to get an accurate count of “full-time equivalent” employees. Your requirements as an employer differ depending on the number of full time equivalents, so understanding this definition is important to remain compliant under the new law.
401k Plans – Employees are considered eligible to participate if they work 1,000 hours during 12 consecutive months which equates to roughly 20 hours per week. As an employer you may want to limit match contributions to only those employees working 40 hours per week however; this is prohibited by the laws governing 401k plans administration.
My goal here was not to address every scenario but merely to share some things to think about as you hire and budget so you can plan appropriately.
If you have specific questions about your employees, and what they are eligible for please reach out to us at AskUs@genesishrsolutions.com, or 800-367-8367.
Genesis HR Solutions is the premier PEO provider for Massachusetts based businesses.
