Case study: part-time employee benefits

Adentist provided competitive benefits for his full-time employees. His part-time employees said they would quit if he didn’t provide benefits for them also.

A dentist provided competitive benefits for his full-time employees. His part-time employees said they would quit if he didn’t provide benefits for them also. They said other dentists offered benefits to their part-time staff. With the financial burden involved in offering benefits and not knowing the regulatory requirements, this dentist procrastinated, which further exacerbated his team’s dissatisfaction and resulted in high turnover.

Considerations

Benefits, or the lack thereof, can influence an applicant’s decision to work for you. Providing benefits enables doctors to effectively compete in the marketplace for qualified employees and to encourage present team members to remain with the practice. But employee benefits can be costly - as much as 12 to 15 percent of payroll costs. Often, employees do not realize the costs their employer is paying associated with benefits.

A national survey conducted by the Academy of Dental CPAs (ADCPA) found an increasing percentage of dentists are now providing medical insurance for their full-time employees. Our own research shows that a large percentage of dental practices now provide other benefits, such as paid vacation, sick leave, and holiday pay.

What about part-time staff? Carol Sladek, a Hewitt Associates consultant, said, “It used to be that companies treated part-time workers very differently from full-time workers. However, with today’s talent shortage, part-time workers are becoming an essential part of the workforce and, as a result, are realizing more benefits.”

Solution

Rather than viewing benefits negatively, consider them as an integral cost of doing business and budget for them as part of the overall staff cost and a percentage of practice overhead. To help employees become more aware of the financial aspects of the benefits they receive, we suggest providing a yearly statement showing their total compensation including the cost of benefits. Our “Annual Employee Compensation and Benefit Summary” (Form No. 403) is designed for that purpose.

If you decide to provide benefits to part-time team members, designate employee classifications in your policy manual to clarify who is eligible to receive benefits. For instance, classifications could be full-time employees, employees who work less than 20 hours per week, and employees who work more than 20 hours per week but less than full-time. These categories can be modified based on your practice needs. Some or all benefits may be offered within each classification. However, it is common not to offer any benefits to employees working less than 20 hours per week.

Should you decide to provide benefits for part-time employees, the easiest and fairest approach is to simply prorate benefits that are given to full-time staff. Here are a few examples:

Medical benefits for part-time staff - If you pay 65 percent of a full-time employee’s monthly premium up to a maximum of $200 ($150 to $200 is average), you may want to pay one-half of the premium contribution you offer full-time employees.

Paid vacation for part-time staff - If a full-time employee who works 36 hours a week receives two weeks of paid vacation a year (for a total of 72 hours), a part-time employee working 24 hours a week who also receives a two-week vacation would be entitled to a proportionate benefit of 48 hours of vacation time.

Paid sick leave for part-time staff - If a full-time employee who works 36 hours a week receives six days of paid sick leave per year (or 48 hours), a part-time employee who works 24 hours a week would be entitled to a proportionate number of hours of sick leave. In this situation, it would amount to 32 hours of sick leave.

Paid holidays for part-time staff - Provide holiday pay only when the holiday falls on the employee’s regularly scheduled workday. Requiring employees to work the day before and the day after the holiday, with the exception of vacation leave, provides an effective check-and-balance system.

This dentist, before consulting with us, lost valuable part-time employees because his wage and benefit package was not competitive and clear. Given the high cost of turnover and the competition for quality staff, providing part-timers with benefits will help you stay competitive in the marketplace.

Bent Ericksen is the founder and Tim Twigg is the president of Bent Ericksen and Associates. For more than 25 years, the company has been a leading authority in human resources and personnel issues, helping dentists successfully deal with the ever-changing and complex labor laws. Both authors are members of the Academy of Dental Management Consultants. To receive a complimentary copy of the company’s quarterly newsletter or to learn more, contact them at (800) 679-2760 or at www.bentericksen.com.

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