Navigating the Rise of Part-Time Employees and Benefits Expectations
Record numbers of employees are working part time. These employees account for nearly 14% of the workforce, or 22 million individuals. The total number of part-timers is the highest to date, reports USA Today.
Experts cite many reasons for the growth in part-time jobs, including more employees:
- Searching for flexibility and work-life balance
- Continuing to work while earning a degree or professional credential
- Balancing caregiving roles
- Transitioning to new careers and industries
- Covering their bills while pursuing side projects or starting their own business
- Testing the gig economy
- Avoiding a gap in employment after a layoff
- Having their hours reduced or only receiving part-time job offers
- Seeking additional funds for travel, holiday gifts and other personal expenses
- Phasing into retirement
- Returning to the workforce after retirement
The increase in part-time participation also heightens expectations about employee benefits for part-time employees, notes Employee Benefit News.
As more people choose part-time roles, they want the same perks typically enjoyed in full-time positions. Meeting these expectations can benefit your employees and your organization.
Employee advantages
Gaining access to benefits brings personal and professional advantages for part-time employees. Benefits can improve their mental, physical and financial health.
Employers are increasingly offering a combination of traditional and industry-specific benefits to engage the emerging part-time workforce.
Traditional benefits being offered to part-time employees include:
- Health insurance
- Dental and vision coverage
- Retirement plan access
- Paid time off
- Life insurance
- Disability insurance
Industry-specific benefits include:
- Schedule selection for desired work days and times
- Flexible and remote work options
- Instant pay access
- Tuition assistance and reimbursement
- Training and professional development opportunities
Organizational advantages
Offering benefits to part-time employees can help your organization stand out from competitors, notes the management services firm ADP.
Full-time employees still receive benefits far more often than part-time workers. According to the coaching platform BetterUp:
- 88% of full-time employees receive medical benefits, compared with 23% of part-time employees.
- 81% of full-time employees have access to retirement benefits, compared with 43% of part-time workers.
By rewarding effort and loyalty among part-time employees, your benefits can boost attraction and retention. These areas are of particular concern in high-turnover industries like retail, food service and hospitality. The labor shortage in sectors with many part-time roles is expected to be an ongoing challenge, notes Employee Benefit News.
Providing benefits to part-time employees can reduce turnover and associated replacement costs. According to the jobs site Indeed, benefits for part-time employees can also:
- Increase job satisfaction and engagement
- Reduce absenteeism by improving employee health
- Broaden employee knowledge and skills
- Demonstrate organizational commitment to all employees
Understand benefits choices and requirements
Benefits for part-time employees vary significantly between organizations and industries, notes BetterUp. This variation allows for flexibility in your benefits design and eligibility requirements.
Benefits choices
You can tailor your offerings to a mix of traditional and industry-specific benefits that appeal to your workforce. Regarding eligibility, Indeed reports some organizations offer benefits to part-time employees immediately upon hire as a way to attract more applicants. Others have a waiting period of 30 to 90 days to ensure employees fit the role and intend to stay.
While you have a lot of choices with respect to part-time benefits, you may still have legal requirements.
Legal requirements
Some state and local laws mandate certain benefits for part-time employees, notes the human resources association SHRM. Examples include paid sick leave, short-term disability, health insurance, unemployment benefits and workers’ compensation. Additionally, some federal laws, including the Affordable Care Act and ERISA, require that part-time employees receive benefits in certain situations. Work with your benefits adviser to ensure compliance at the state, local and federal levels.
Under the federal SECURE Act, part-time employees who work 500 hours a year for three consecutive years must be allowed to participate in your retirement savings plan beginning in 2024. The threshold reduces to two successive years in 2025. This legislation addresses access, vesting and salary deferral. You are not required to make matching or nonelective contributions for part-time employees, notes ADP.
For more information on benefits for part-time employees, talk to your insurance broker or benefits adviser. They can help you examine offerings that meet your business goals and keep you in compliance with evolving legislation.
This content is for informational purposes only and not for the purpose of providing professional, financial, medical or legal advice. You should contact your licensed professional to obtain advice with respect to any particular issue or problem.