Can You Vary Your Benefit Offerings Based On Employment Status?
When it comes to employee benefit plans there isn’t a one size fits all approach. Plan designs differ from client to client, taking into account what they deem to be of value to their organization, what is feasible within their budget, etc. But did you know that plan designs within a company can also vary depending on your employment class.
What is an Employment Class?
Now you may be asking yourself what exactly is an employment class? This is a term that is used to describe different employment statuses within a workplace. For example, traditionally you’d likely see that broken down into temporary or contract, part-time, full-time, management or executive classifications. And, it’s extremely important to note that these different classes cannot be based on age, gender, sexual orientation or any other identifier that may be deemed as discriminatory.
Defining Employment Classifications
When it comes to edibility of items like health and dental benefits, health spending account, life insurance, etc. we highly recommend that you have clearly define parameters around each classification. This can include, but is not limited to:
- Contract status (i.e. contract, permanent, etc.)
- Employment status (i.e. full-time, part-time, management, executive)
- Weekly hours worked (i.e. under 30 hours or over 30 hours)
- Compensation package (i.e. are they a salaried individual or in a commission-based position)
Differing Coverage Based on Classification
As you can imagine, someone who is a full-time, salaried employee will have a drastically different compensation package than a part-time, hourly employee, and you can achieve the same thing with a benefits package. In fact, you can get pretty creative. For example, you might opt to only offer benefits to those with a full-time designation. Alternatively, you could offer different levels of coverage by having 50% co-insurance for part-time employees and 80% co-insurance for full-time employees. The possibilities are numerous and it’s really up to you and your benefits specialist to determine what best fits the needs of your diverse employment classifications.