Broker Check

How 401(k) Changes Affect Coverage for Part-Time Employees

August 23, 2022

From independent contractors to gig workers to freelancers — a growing number of organizations rely on part-time employees to get the job done. In fact, as of March 2022 there were around 25.9 million people employed on a part-time basis in the U.S.* If your staff includes part-time workers, then you may want to pay close attention to recent developments that impact employer-sponsored retirement benefits. 


In our last article, we introduced a key change proposed by the new H.R. 2954 “Securing a Strong Retirement Act of 2022” bill — also known as SECURE 2.0 — recently passed in the House with strong across-the-aisle support. If made into law, SECURE 2.0 will raise the required minimum distribution age for 401(k) plans to 75, allowing individuals to save more for their retirement. 


Another major provision of SECURE 2.0 involves part-time employees, including gig workers, freelancers, independent contractors, and caregivers. If passed, this new bill will require employers to allow certain part-time employees to participate in 401(k) plans. Specifically, SECURE 2.0 enables employees who work at least 500 hours a year for two years — the equivalent of just under 10 hours a week — to contribute to a retirement account. 


The purpose of this provision is to allow the growing number of part-time workers to access — in many cases, for the first time — retirement benefits and start saving for retirement. While good news for part-time workers, the SECURE 2.0 provision places an additional administrative burden on the employers who hire them. 


To ensure compliance with the bill, employers will need to make sure they meticulously track all their employees’ hours — including part-time employees’ hours. Finding the time, resources, and systems to do this may present a challenge for some organizations, especially those with HR departments already stretched thin. 


Fortunately, you don’t have to face this challenge alone. StoneKimbro’s retirement plan professionals are paying close attention to SECURE 2.0 and its myriad implications for employers. We’re ready to help you prepare for the changes this bill brings. That includes advising you on a course of action to ensure your eligible employees are covered, your organization is compliant, and your HR department is supported. 


To learn more about SECURE 2.0 and how it may impact you and your employees, don’t hesitate to reach out to me directly at 949.556.9772 or