Benefits for Part-Timers Working Full-Time Q&A

Benefits for Part-Timers Working Full-Time Q&A

Q: When does a part-time or temporary worker become a full-time
employee? We have a part-time employee who has been working up to
40 hours a week on a special project, but who is not receiving full-time
benefits.

A: There is no set number of hours that an employee must work
before becoming a full-time employee under federal law. That definition
must be created by the employer.

Most employers define full-time employees as those who regularly work
35 to 40 hours a week. These employees typically are entitled to
benefits such as paid sick leave, vacations, and insurance coverage.

Part-time employees are those who work less than a full-time schedule,
and they may be eligible to receive some benefits. Temporary
employees can work either a full or a part-time schedule but are usually
hired for a specific project or for a finite period of time, and they do not
usually receive any benefits.

If a part-time employee works a full-time schedule on a temporary basis,
such as to complete a project or during a busy production period, most
employers do not reclassify the employee as a full-time employee eligible
for full-time benefits. However, if it appears that the part-time employee
will be working a full-time schedule for an extended period or indefinitely,
you should consider reclassification so the employee is entitled to the
benefits of a full-time position.

The same is true for a temporary employee. If they are working
indefinitely or in a position normally performed by full-time employees,
you may be misclassifying them.

It can be very expensive to misclassify part-time and temporary
employees. Microsoft found this out the hard way. A few years ago, it
was ordered to pay $97 million to settle lawsuits alleging it misclassified
workers as temporary employees or independent contractors. A court
had ruled that it improperly excluded them from participation in its
benefits plan, including a generous stock purchase plan. As a result,
Microsoft had to reclassify the employees and offer them appropriate
benefits.

To reduce the risk of this type of liability, you should keep a close eye on
the number of hours your part-time and temporary employees work to
ensure they have not become full-time employees in actual practice. In
addition, you should periodically review your benefit plan language,
employee handbooks, and personnel policies, and labor contracts to
make sure they describe accurately who is intended to be included in
your benefit plans.