Hiring employees undoubtedly comes with responsibilities, but what if they’re only part-time? Part-time employees can be a great, cost-effective way to scale your business. So let’s dive in to the insurance requirements for part-timers.
What Is Part-Time?
Generally speaking, a part-time employee works less than 30 hours per week, and a full-time employee works more than 30 hours weekly. Other times, the distinction is drawn between employees that work 40 hours or anything less than 40 hours.
However, in most cases the definition is up to the employer, and does not affect insurance, benefits or other employer responsibilities. The one main exception to this is health insurance coverage under the Affordable Care Act.
Unemployment Insurance: Always
Unemployment is a federal-state joint program, so eligibility requirements and benefits vary by state. Employers are required to pay federal and state unemployment taxes to fund unemployment benefits.
This is one of the primary reasons it’s important to distinguish between employees and independent contractors, and avoid the costly mistake of misclassifying an employee as a contractor.
Workers’ Compensation Insurance: Almost Always
Workers’ compensation insurance is designed to protect employees from injuries or illnesses they might suffer as a result of their job. Small businesses are required to carry workers’ compensation insurance once they have several employees. The minimum threshold and specifics depend on the state, but in nearly all cases, part-time employees count the same as full-time employees toward your state’s limit.
Part-time employees are also covered to the same extent as full-time employees. However, insurance premium costs are based on payroll, so a small business insurance policy covering a payroll of part-time employees will often cost less than for full-time employees.
Seasonal workers also need to be covered by a work comp policy. Even if hiring seasonal help, leave the policy in effect for the entire year.
Workers’ compensation is regulated at the state level, so check your state’s requirements to make sure you comply.
Disability Insurance: Sometimes
Disability insurance covers a portion (typically a percentage) of a worker’s wages if they are unable to work. If you’re in California, Hawaii, New Jersey, New York or Rhode Island, you’re required to offer disability insurance and cover the premium for employees.
Disability insurance also can be offered as a voluntary benefit, whether the cost is covered in full by the employer or in part. Some larger employers might allow employees to purchase it through the company, which allows workers to get coverage for a lower group rate.
Get Workers’ Compensation Insurance for Your Small Business
The simplest way to get small business insurance is to work with an expert. WorkCompOne was built by and for small business owners, so you can be compliant for less time, money and hassle than traditional insurance agencies.