Classify part-time, full-time employment to determine benefits

Many employers offer benefits to their full-time employees that they don’t offer their part-time employees. But when employees work part-time some weeks and full-time other weeks, determining their status for benefits purposes can be tricky. Fortunately, we have some helpful advice.

Define your terms

Determining whether a variable-hour employee qualifies for benefits depends on how you classify part-time versus full-time employment and how state and federal law defines such work. You should internally define part-time and full-time employment and consistently apply such definitions, as well as follow state and federal laws related to employee benefits.

For example, federal law requires “applicable large employers” (employers with at least an average of 50 full-time employees) to offer full-time employees medical benefits. The Internal Revenue Service (IRS) and the Affordable Care Act (ACA) define a full-time employee as an individual working at least 30 average hours per week or 130 hours per month.

This determination is generally made based on a monthly measurement method (MMM). However, employers that have variable-hour employees can use a lookback measurement method (LBMM) instead.

LBMM vs. MMM