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When should a part-time employee be reclassified as full-time?

When a part-time employee has been consistently working on a full-time basis, an employer cannot overlook the need to re-evaluate the employee's status. Employers generally define part-time and full-time status internally and use this status to determine benefit eligibility. If an employer denies employees benefits they are eligible for, there can be serious legal implications. Timely evaluation and reclassification to a full-time status when appropriate can eliminate these risks.

Some federal and state laws may define part-time and full-time employees for compliance with that particular law. For example, the Patient Protection and Affordable Care Act (commonly referred to as the ACA) defines a full-time employee as an employee who works on average at least 30 hours per week, or 130 hours per month. Regardless of how the employer defines eligibility for other company benefits, for health insurance, an employer covered by the ACA will be required to use the definition under the ACA to avoid paying penalties. See Identifying Full-Time Employees.

An employee's classification as full-time or part-time has an impact on other benefit offerings, as well. Many employer benefit policies have eligibility requirements and will state, for example, that "all full-time employees working 35 hours or more per week are eligible." When a part-time employee is working 35 hours per week consistently, a problem arises if this employee is denied benefits based on his or her part-time classification.

But what does "consistently working" mean, and how often should an employer evaluate a part-time employee's classification? Again, this decision is largely up to the employer, but working with legal counsel to determine a reasonable standard for full- and part-time classification would be wise. Some questions to consider include:

  • Is there an end date to the part-time worker's extended hours? Perhaps the employee is filling in for another employee on short-term leave or helping on a project with a certain deadline not too far in the future. If so, this may help defend the employer's stance that the worker is not a full-time employee.
  • Are the extended hours seasonal, increasing during busy times of the year? Consider including this information in the definition of part time, as well as stating limitations on the number of weeks such extra hours can be worked per year, and closely monitor the extra hours worked.
  • Is a clearly defined period of extra work time preferable? Internally define "consistently" as 30, 60 or 90 days, and re-evaluate a part-time employee's classification at that time.

Whatever reasonable standard employers choose, this decision should be reflected in company policies and benefit plans as appropriate. The standard must be followed consistently, and part-time status evaluations should be ongoing.


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