As I understand it, for a person to be considered a full-time employee, he has to work 1,800 hours. At 40 hours a week that comes out to 45 weeks, minimum. My question is: could a person sign a contract with a company where they receive $X salary and, let’s say, 16 weeks vacation, so they would bring the number of actual days worked wellunder the 1,800?
This might be confusing so let’s try this. Acme, Inc. wants to hire me. I want, and can get, $50,000 a year at many other places. But let’s say I’ve consulted at Acme, Inc. for a few weeks and they’d really love to hire me, but they only have $30,000 and realize that this is inadequate. Could we then agree to a contract where I’d be considered a full-time employee in the eyes of the law (qualifying me for full benefits) but only work 60% of the year and receive 20 weeks or so of vacation time?
Why not just have the benefits written into the contract? If the company is willing to stipulate that you will receive benefits, why does the law need to be involved?
On what do you base this understanding? Do you believe this to be the “law” in your state? Do you believe this to be a generally true rule applied by companies in your area? :dubious:
As I understand things, federal laws prohibit benefits, (health insurance, 401K, etc.) being given to to non full-time employees. Do you know that to not be the case?
My understanding (although it’s been a good many years since I dealt with this) is that a company is not prohibited from extending benefits to part-timers if they want, but they rarely do. However, they couldn’t just extend to you, they’d have to do ditto to all part-timers. And it tends to be costly, for a variety of reasons (not least of which, insurance companies don’t like it and up the premiums if people are not full-time at work, because it could be an excuse to sneak terminally ill old Uncle Fred into the group policy.)
The easiest thing for them to do is to include in their payments to you, an extra amount that is sufficient to buy benefits on your own: IRA instead of 401(k), and find some group medical insurance, etc. Be sure that any such amount is adjusted for taxes: you’ll want enough left after taxes to be able to buy the benefits. And also be sure that the amount is sufficient to pay premiums for insurances (group rates are much cheaper than individual rates.)
I have no knowledge of that, but I could be wrong. It seems unlikely. Laws prevent benefits from being offered to one employee and not another if they are in the same class. As far as I know a company could offer health care to everyone; there are only restrictions on when it can deny it.
There is no law requiring benefits to be offered to anyone. The law just defines “full time” when it comes to companies who do offer benefits. In other words, if company A offers benefits to “all full time employees.”
Salaried employees are often exempt. I would think that contract employees are as well.
As others have pointed out, the legal problem is with offering benefits to a single part-time employee but not all employees in a similar classification. It sounds like Acme defines full-time as 1800 hours per year. More typical is 2080 hours per year with 2 weeks of that as paid vacation. Many U.S. companies offer benefits to part-time employees. They sometimes provide less of a subsidy to part-time employees than to full-time employees. This is all common practice which I am familiar with from working in HR. See Employee Retirement and Income Security Act (ERISA) for more details.
I am speculating here, but perhaps you are worth $50,000 as a contractor, but $30,000 as an employee. Most contractors are able to get considerably less than their bill rate as regular, full-time employees. A figure I’ve seen often puts the value of family health insurance at $11,000 per year. An employee can often expect to make 30 to 50% more as a contractor in large part because the employer doesn’t have to provide health insurance and other benefits. Another concern with your plan is that those benefits cost Acme whether you take them as cash or benefits. Sure, the employer gets tax advantages when paying for benefits, but the benefits are paid by the employer.
I understand what you are saying but you’re giving the numbers in my example to much importance. I completely understand that contract work pays more than staff work. That is not the issue. For the example, let’s say that the contract work is over $100,000, the salary I would accept as a full-time (1800 hours) staff employee is $50,000. But they can only pay $30,000. I’m trying to see if we could in essence agree to me being hired for $30,000 (getting full benefits) but getting around the 1800-hour thing by building in 16 weeks of vacation. I guess the question is does vacation time count as “hours worked” as it applies to the 1800 number?
I’d also ask if there any other ideas. They want me to do more work for them. hey would love to hire me. But they can’t afford me full-time. We’re both thinkiing of creative ways to address, so any ideas are appreciated.
This makes sense, but it kind causes to problems. One, it eliminates the benefit of me getting off my very expensive private health insurance, whcih is one reason I’m thinking of going on staff someplace. It also increases the out of pocket for the employer, who only has the $30,000.
Their out of pocket is more than $30,000 for you, no matter what. Your benefits would be paid for each month, and they’re including that in their calculations of how much they can afford to pay you.
Though it’s true that it would be more expensive to give you enough to buy your own insurance than to allow you access to the group plan.
As others have said, there is no one “legal” definition of full-time. Full-time is typically defined by contract with medical insurers. We talked about this a little bit here: Insurance question - Factual Questions - Straight Dope Message Board And is also usually defined in plan descriptions.
So the employer can’t just wave a magic wand and define an employee is “full-time.” If a single employee is given special treatment, the employer could be subjected to:
Liability for insurance fraud.
Discrimination claims by similarly situated employees who didn’t get benefits; and
Liability or plan disqualfication under ERISA.
None of which are good.
OTOH, there may be workarounds to some of the requirements. You’d have to look at the specific definitions in each document. For one thing, many definitions says something like, “the employee is regularly scheduled to work XX hours per week.” This definition doesn’t mention the yearly total of hours worked, it’s based on a typical weekly (or monthly)* schedule. Giving the employee a long vacation (itself a benefit) probably won’t disqualify an employee from receiving benefits (although one could argue about whether an employee who gets four months off for vaction is *regularly * scheduled to work at all.)
*“A non-exempt employee who is scheduled to work at least 40 hours per week on a regular basis or an exempt employee who is scheduled to work at least 173.3 hours per month on a regular basis.” http://www.bwxty12spd.com/glossary.php
Is a contract able to circumvent any of this. For instance, I’m sure plenty of CEOs craft their own packages with all kinds of special deals and stipulations. Aren’t they also considered full-time employees?
The key here is the last letter. CEOs are corporate *officers * and can be compensated differently (some restrictions apply, but they aren’t treated as part of the rank and file.) It gets a bit trickier when you talk about executive compensation, in general.
But no, you can’t contract with your employer in a way that will trump the requirements of contracts with third parties. Either your arrangement meets the criteria, or it doesn’t. Where you need to get creative is in finding a way to get the deal closest to what you want and still qualify for benefits.
TimeWinder’s right, too. There is no law that says part-time employees can’t get benefits. Most employers don’t want to pay them to part timers, and many go out of their way to make sure that part-timers don’t cross the line to full-time accidentally. That increases their costs.
Sorry for the misunderstanding originally. In some cases high level executives get what are called non-qualified benefit plans. That means the company provides the benefits, but does not get the tax advantages it gets in offering benefits to the regular employees. Non-qualified means that it doesn’t meet the requirements of ERISA. So in this sense, yes, a contract can circumvent some of this, BUT at expense to the employer. If what they have to offer is $30K and no more, this still doesn’t solve the problem.
If you become their regular, benefits-eligible employee, and if they provide COBRA, once you leave their employ you are eligible to continue on their group insurance for 18 months, with you paying the employer and employee contributions. This is probably still less expensive than completely private insurance it sounds like you have now. That’s all I can come up with.