There aren’t a lot of federal regulations focused on part-time employee benefits, so it’s up to the employer’s discretion what type of benefits they will give their workers. Companies would typically offer the same benefits to part-timers as they would to full-time employees—the most common of which include health insurance, tuition insurance, fringe benefits, and overtime pay.
Despite the cost, offering part-time benefits has a positive impact on businesses, such as improved reputation, increased value to top talent, and improved loyalty and retention. This article aims to help business owners navigate part-time employee benefits, helping you create a benefits package that aligns with your company’s goal and budget.
Most Common Part-Time Employee Benefits
Understanding the scope of part-time benefits is important. Here are the most common types of benefits a part-timer might receive:
Medical insurance is one of the four major types of benefits a company can offer to its employees. It makes a lot of sense, since health care takes a huge chunk out of a family’s budget. The average health insurance premium for one person in 2023 was $8,435/year, which was a 7% increase from 2022. Having said this, only 25% of part-time employees have medical benefits compared to full-time employees according to the Bureau of Labor Statistics (BLS).
The most common types of insurance are:
- Health Insurance: It usually includes, but is not limited to, physician visits, hospital stays, emergency room attendance, surgical procedures, and prescription drugs.
- Dental Insurance: This coverage typically includes routine preventive care (tooth extractions and fillings) and more complex procedures, such as orthodontics, crowns, and bridges. Cosmetic procedures like whitening are not covered.
- Vision Insurance: Basic coverage includes routine eye exams and prescription eyewear, while comprehensive ones include corrective procedures like Lasik.
Continuing education has become a priority for many employees, and offering tuition assistance programs can be an excellent way for companies to invest in. Not only are you investing in your employee’s growth but you are potentially securing their loyalty. Here are a few examples of tuition assistance programs you can offer to your employees:
- Reimbursement Programs: Under this program, the company could cover a part of or all of the tuition cost after the employee successfully completes the course. Sometimes, employees are required to maintain a grade point average.
- Direct Partnership: Some companies partner with universities or colleges to offer programs tailored to their industry’s needs. These programs allow part-time employees to enroll in courses at discounted rates.
- Online Learning: Other businesses may offer employees courses from online learning platforms like Coursera and Udemy. This gives part-time employees the flexibility to learn at their own pace. Here are some examples of free online courses you can start offering to your part-time employees.
Any employee would love time away from work and offering PTO to your part-time employees can have a positive effect on their productivity. You can structure their PTO in hours or days, accruing over time. You can also roll any unused PTOs over to the next year.
For help in creating your policy, check out our guide to creating a PTO policy.
Disability coverage offers income protection in the event an employee cannot work because of illness or injury. Employers who invest in this type of benefit show how they value the well-being of their part-time workers.
According to the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019, any employee who has worked at least 500 hours for three consecutive years is eligible to participate in a company’s 401(k) plans. Congress has amended it recently under the SECURE ACT 2.0, shortening the waiting period to two years.
Learn how to set up a 401(k) in our guide.
In the event of a termination, unemployment benefits can provide part-time employees with a cushion as they look for a new job. In most states, unemployment benefits are based on the employee’s earnings or the actual hours they worked.
These can be quite varied from on-site childcare to wellness programs to discounts for company products and services. Just a note to remember: Fringe benefits are usually taxable, which means you have to deduct taxes for most of the benefits you give to your employees. However, there are also non-taxable benefits that the IRS specifies.
Some examples of taxable benefits are bonuses, gift cards, and clothing. The non-taxables include accident insurance, child care assistance, and gym memberships. For a complete list, read our guide to taxable and non-taxable fringe benefits for small businesses.
A part-time employee who works at least 40 hours per week and is classified as a nonexempt by the Fair Labor Standard Act (FLSA) is eligible for overtime pay. Overtime pay is around 1.5 to 2 times an employee’s regular pay. Here are other helpful articles that can help you on how to calculate overtime pay and what types of employees are eligible for overtime pay.
- How to Calculate Overtime
- Minimum Wage and Overtime Exemptions Under the FLSA
- Shift Differential Policy
Pros and Cons of Providing Part-Time Benefits
While offering benefits can boost employee satisfaction and productivity, the cost can present challenges, especially for small businesses. Thus, you have to find the right balance to make a strategic decision about providing part-time employee benefits. Here’s a table that shows its advantages and disadvantages:
| PROS | CONS |
|---|---|
| Cultivates a sense of belonging and loyalty | Can strain the budget |
| Builds company reputation | Increases administrative workload |
| Gives access to a broader talent pool | Risks for unequal value perception |
Tips When Creating a Part-Time Benefit Package
After discussing the different types of part-time employee benefits, the next challenge is creating a benefit package that resonates with your part-time workers. Here are some tips to remember when doing that:
1. Be Aware of Legislative Changes
Keeping track of any legislative changes is good business practice. It also ensures that your compensation and benefits policies comply with local and federal laws. These can range from the health benefits regulated by the Affordable Care Act (ACA) to laws regarding unemployment insurance. Regularly review and update your policies as needed.
2. Tailor the Package to Your Employees’ Needs
As the cliché goes, there’s no “one-size-fits-all” solution, and that also applies to benefits. Conduct a survey to get insight into your employees’ needs. What are their desired benefits? Do they want access to professional development opportunities, or do they prefer a retirement savings plan? Evaluate your current benefits package and identify any shortcomings. This will help you create a unique benefits plan that suits your workforce’s needs.
3. Communicate What You Offer
Even the best benefits package can fall short if your employees don’t understand it. To avoid this, communicate it clearly and consistently to your employees. Additionally, make the information readily available, so your employees can fully utilize their benefits.
4. Evaluate Your ROI
Identify which benefit brings the highest ROI, both from your employees’ perspective and your organization’s growth. Regularly review your benefits package and make adjustments only when necessary. It will meet your objectives better without straining your budget.
5. Anticipate the Pitfalls
While benefits boost employee satisfaction, it presents potential challenges to businesses, such as additional costs and workload. Utilize strategies and resources to address these challenges. For example, you can encourage employees to contribute to their benefits or look for a cost-effective alternative.
Bottom Line
Navigating the laws and regulations on part-time benefits isn’t as easy as it looks. Part-time employee benefits are essential for retaining top talents and engaging employees to do their best. By giving them a robust and thoughtfully crafted benefit package, you send a message that you value them and care for their mental wellness.
