Part-Time Employee Benefits – What’s Required, and the Advantages of Offering Them

Part-time employees are a vital part of many workforces, from waiters to bank tellers to graphic designers. Even though they work fewer hours than their full-time colleagues, they drive important business results. That’s why your company hired them, after all!

Although companies do not have a legal obligation to offer part-time staff the same benefits as full-time roles, providing competitive benefits can be a strategic investment. For example, competitive health insurance may make it easier to recruit, and wellbeing benefits can increase productivity. Approaching benefits in this way enables your HR department to have a measurable impact on your organization’s bottom-line success.

Let's explore both legally required and elective benefits, as well as why extending perks to the entire workforce is becoming a competitive advantage.

Who Are Part-Time Employees? 

What it means to be a part-time employee depends on who you ask. The IRS considers anyone who works less than 30 hours a week to be part-time. That being said, states and organizations will have different rules about what exactly equates part-time work — someone who works 35 hours per week might be part-time at one company but full-time at a company down the road.

Over 27 million Americans currently hold part-time positions. As a result of the pandemic, workers reassessed their careers and many opted to reduce their hours. This shift is frequently attributed to factors like burnout and childcare responsibilities. Notably, women constitute about 63% of this part-time workforce. Many of them are in dual-income households and often shoulder a significant portion of childcare duties.

What Part-Time Employee Benefits Are Required?

Part-time employee benefits are any kind or perks you offer employees who work fewer hours than your full-time employees.

Though part-time employees are entitled to fewer benefits, there are still some that companies are required to provide. The Fair Labor Standards Act (FLSA) doesn't differentiate between part-time and full-time employees, for example, so FLSA benefits are still required for part-time employees. These include: 

• Overtime: Any employee who works more than 40 hours per week (and isn’t FLSA-exempt) is entitled to time and half pay (or more) for overtime work—including part-timers. 
• Workers’ compensation: All employees are covered under an employer’s workers’ compensation policy. That means if a part-time employee is injured on the job, they’re covered. 

Other legislation at the federal and state level also extends additional benefits to employees working less than 40 hours per week:

• Retirement Plans: Anyone who works 1,000 hours or more in a year for one employer is entitled to take part in the company’s retirement savings plan according to the Employee Retirement Income Security Act (ERISA). If a part-time employee hits 1,000 hours, they get this benefit. 
• Unemployment benefits: Depending on the state, part-time employees who are laid off through no fault of their own are entitled to some form of unemployment compensation. 

All other part-time employee benefits are up to the organization, so adding additional benefits could help your company stand out as a desirable employer. 

Additional Benefits Companies Can Offer Part-Time Workers

There’s nothing saying you have to offer part-time employees only those benefits.  In fact, going above and beyond could help your organization — giving your part-timers benefits beyond the legal minimum may make it easier to recruit top talent. 

Health Insurance Solutions

If someone isn’t working full-time, you’re not legally required to provide health insurance. However, as health insurance is one of the most-sought after employee perks, offering this benefit can expedite your talent acquisition. Options you can choose to provide part-time team members includes:

• Medical insurance. This usually covers doctors’ or hospital visits, prescriptions, and annual exams. 
• Dental insurance. This usually covers exams, cleanings, extractions, and repairs (but not cosmetic procedures). 
• Vision insurance. This usually covers exams, prescription glasses or contact lenses, and surgeries like laser eye procedures or cataract surgery. 

You can offer health insurance solutions like you do for your full-time employees, or health savings accounts at different rates. 

Tuition Assistance Programs

Education assistance benefits are becoming increasingly popular. There are a variety of ways to go about this type of employee benefit, so here are three to get you started: 

• Tuition reimbursement. Eighty percent of large employers offer tuition reimbursement, which is where the company pays employees back for successful completion of a continuing education course. 
• Loan programs. Many people take out a loan to pay for tuition in order to qualify for their jobs with a company. In this program, organizations help their employees repay those debts.
• Stipends. Educational stipends are an allotment of money given to an employee to pay for continuing education. This differs from reimbursement because stipends are given before the course is taken, rather than a repayment of tuition after the employee incurs the expense.  

Professional Development Strategies

Investing in professional development is not limited to full-time employees — part-time team members can also benefit from such initiatives. You can consider providing opportunities like attending conferences, granting access to courses and certifications, or establishing a mentorship program. These benefits not only enriches the skills of your workforce but also contributes to the overall growth of your company. Eighty-nine percent of workers say professional development helps them stay engaged in their work, and engagement is a major determinant of organizational success. 

Paid Time Off 

Addressing time-off concerns for part-time workers goes beyond just granting unpaid leave. Many people cannot afford a pay reduction, after all. PTO options for part-time employees include allocating a specific number of paid days off, or implementing unlimited time off work workers across the organization.  

Retirement Planning Guidance

Preparing for retirement can be overwhelming, so offering retirement planning assistance can greatly benefit your employees. You may consider providing access to financial counselors, reimbursing employees for community-based retirement planning courses, or arranging for retirement experts to visit your company for one-on-one consultations. 

This support empowers your team members to plan effectively for their individual retirement goals. Chances are, this is a benefit that your employees will greatly appreciate: Financial wellbeing is the second-most important dimension of wellbeing to workers around the world (just after physical wellness), according to Wellhub’s State of Work-Life Wellness 2024 report.

Employee Stock Options

Another way to support the financial wellbeing of employees is supporting them as investors. You can offer annual classes on stock investment strategies, allow employees to purchase company stocks, or provide financial incentives for quarterly investments. Offering stocks not only supports your part-time employees financially, but also aligns incentives — it gives them a direct interest in the company's success, fostering a sense of ownership and commitment.

How Offering Part-Time Benefits Can Help Employers

Offering perks is often a strategic advantage to organizations, not just their workers. Employee benefits can ease everything from talent management to productivity. This is true for part-time and full-time workers alike — people are people, after all. Here are some of the ways offering benefits to part-time employees can give your organization a competitive edge. 

1. Attracting and Retaining Top Talent

In today's competitive job market, attracting and retaining talent is a constant challenge. Offering part-time benefits can be a powerful recruitment tool. When potential employees see that you value your part-time workforce and provide them with essential benefits, they are more likely to consider your organization as a preferred employer. As an added bonus, offering such benefits can help retain your existing part-time talent. This can reduce turnover rates and the associated costs of recruiting and training new staff.

2. Boosting Employee Morale and Productivity

Any employee who feels valued and supported by their employer tends to be more engaged and motivated. Providing benefits, even to part-time staff, demonstrates your commitment to their wellbeing. This, in turn, can boost morale and increase productivity. Engaged employees are more likely to go the extra mile, contribute innovative ideas, and create a positive work culture.

3. Reducing Absenteeism

Offering part-time benefits can improve the reliability of your part-time workforce. When employees have access to healthcare and other essential benefits, they are better equipped to address health concerns promptly and maintain their wellbeing. This, in turn, reduces absenteeism due to health-related issues, helping provide the company with consistent and reliable workforce.

4. Supporting a Diverse and Inclusive Workplace

Promoting diversity and inclusivity in your workplace is not just a social responsibility — it’s a strategic advantage. Diverse teams make more money and better decisions, according to McKinsey research. Offering benefits to part-time employees contributes to a more inclusive work environment by making your jobs attractive to a wider variety of candidates.

5. Strengthening Your Employer Brand

Your company's reputation is a valuable asset, and it can significantly impact your ability to attract both customers and employees. Being known as an employer that offers benefits to part-time staff can enhance your reputation within the job market and the community. 

The Challenges of Offering Benefits to Part-Time Employees

While providing benefits to part-timers has many upsides, there are some potential hurdles for companies to consider. Especially if you are rolling out these perks for the first time, you will want to consider how your organization will address these complications before sharing the news with your workforce.

Increased Costs

Adding more employees to benefit plans can raise overall costs for organizations. To manage expenses, HR can research lower-cost health insurance options specifically geared to part-timers. They can also implement eligibility waiting periods, require employee contributions, or prorate company subsidies based on hours worked.

Administrative Complexity

Managing benefits across full-time and part-time employee groups with differing eligibility and access rules can quickly become complex for HR admins. Creating clear policies around eligibility, automating enrollment where possible, and educating managers can help streamline processes.

Perceived Inequities

Full-time staff paying large premiums may feel it unfair that part-timers pay less towards the same plans. HR leaders can be transparent about the rationale for prorated subsidies and emphasize that everyone receives core coverage.

Compliance Risks

Since some staffers meet monthly hour maximums unpredictably, HR must regularly track hours to manage benefit eligibility and avoid compliance violations. Advanced workforce management systems can automatically flag when part-timers approach minimum thresholds.

While challenges exist when bringing part-timers into the benefits fold, careful planning by HR can prevent major headaches down the line. Taking a strategic approach allows organizations to access a wider talent pool while keeping employees healthy and productive.

One Benefit, Multiple Business Advantages

Including a wellbeing program in your benefits package can help every employee — and your organization's performance. 

Improving workforce wellbeing can increase employee productivity and decrease healthcare spending. There’s a reason 90% of companies that track the results of wellness programs see positive returns on the investment!

More than 15,000 companies already trust Wellhub with their employee wellbeing. Our flexible subscription gives them access to more than 50,000 wellness providers, meeting employees wherever they are on their wellness journey.

Talk to a Wellbeing Specialist today to increase wellbeing and decrease costs.

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