Types of Employees – Their Classes and How to Identify Them

Types of Employees – Their Classes and How to Identify Them

Expanding the offerings and opportunities your business gives employees stands as a mark of success. Congratulations! However, like any business owner experiencing sudden growth, you may feel somewhat overwhelmed by new compliance responsibilities, terminology, and more.

At Group Enroll, we believe that information access empowers managers and their teams to make the best decisions for their work environments. We help businesses like yours find and compare group insurance and benefits plans. In this blog, we talk about what an employee class is, how these classes pertain to ICHRA implementation, and what the standard employee classes are. You’ll learn how to identify these classes and arm yourself for HR compliance and other critical workplace functions.

What Are Employee Classes?

Employee classes are ranking designations and any methods through which an organization identifies individual employees for recordkeeping and other bureaucratic functions. Management and HR teams use employee classes or classifications to codify and sort various workplace information.

The most common employee classes pertain to an employee’s work volume with designations such as full-time, part-time, and so on.

To clarify classifications for compliance purposes, HR teams break down employee classes into categories and subcategories.

Full-Time Classifications

Employers consider employees who work the “maximum” required hours for any given period to be full-time employees.

The number of hours an employee must work to be considered “full-time” varies from employer to employer but ranges from 30 to 40 hours a week.

Regular Full-Time

Regular full-time employees work the maximum required hours year-round, except during paid time off, vacations, or medical leave. In most employment situations, paid time off and holidays do not count towards weekly work averages, but this measure remains up to the employer’s discretion. 

Temporary Full-Time

Employees who expand their work availability and output to exceed the part-time range for a short period become temporary full-time employees for HR recordkeeping and insurance purposes.  

Benefit Plan Participant

Whether considered a regular or temporary full-time employee, any individual may opt in or out of benefits during appropriate periods. For accurate recordkeeping and compliance, HR teams designate which employees are benefit plan participants.

Part-Time Classifications

The part-time employee class typically includes employees who work 30 hours or less. Some employers may require part-time employees to work a minimum number of hours per week, normally ranging from 15 to 25 hours. 

Regular Part-Time

Like their full-time counterparts, regular part-time employees complete a routine weekly commitment of their designated work hours. 

Temporary Part-Time

Temporary part-time employees could include those employees planning short working terms, seasonal work terms, or those employees who have stepped down from full-time work for a limited time.

Benefit Plan Participant

In workplaces where temporary workers qualify for benefits like health insurance or other benefits packages, HR teams must designate whether temporary or regular part-time employees are benefit plan participants or have opted out.

Part-Time Excluding Benefits

Many companies choose to separate the part-time employee class into separate tiers. In these cases, part-time employees with terms less than 90 days on average become excluded from benefit eligibility.

Special Classes

Special classes exist in many workplaces to categorize employees who don’t fit typical full or part-time classifications, such as independent contractors. 

  • Interns: Intern positions fluctuate wildly, even within the same workplace. The hours and responsibilities required of many interns may simulate competitive environments. In these situations, a separate classification helps HR teams stay in compliance while maintaining fairness in benefit eligibility practices.
  • On-Call: Like interns, on-call employees may experience fluctuations in working hours and shifts.

How Do Employee Classes Work in an ICHRA?

Canadians use private insurance, including individual coverage healthcare reimbursement arrangements (ICHRAs), to supplement government-provided universal healthcare coverage. Employee classes help employers and HR teams determine which levels of benefits a given employee qualifies for.

While employers and HR teams may utilize an in-house employee class system for recordkeeping, ICHRAs often contain their own employee classifications.

Compare the employee class designations of a given group or small business plan with your organization’s system for clarity when completing relevant application forms.

Full-Time Employee

Full-time employees under ICHRA classifications must average 30 hours minimum per designated work week. While some employers require employees seeking full-time classification to work a minimum of 40 hours per week, these regulations do not comply with ICHRA minimums.

Part-Time Employee

ICHRA systems allow employers flexibility in part-time classifications. Employers may choose to require part-time employees to work less than 40 hours weekly or may choose 30 hours as the maximum amount.

Seasonal Employee

ICHRA policies consider seasonal employees to be full or part-time employees who may work yearly, but only during certain times of the year. Terms for seasonal employees may extend beyond the temporary employee limits of 90 days.

Temporary Employee

Temporary employees can be full or part-time employees who typically complete their employment term within 90 days. Temporary employees may work for the same employer multiple times but, unless promoted to full-time, will only work for periods of 90 days or shorter.

Employers typically source temporary employees through agencies designed to recruit for this type of work. In most cases, temporary employees have an opportunity for advancement to full-time at the end of their temporary term, but this is not required.

Salaried Employee

Salaried employees typically forfeit overtime pay and have a designated schedule every week. These employees may become eligible for special incentives not available to other classes of employees.

Hourly Employee

Hourly employees can be full or part-time employees. Hourly employees qualify for overtime in most workplaces and can opt in or out of benefits packages depending on their average number of hours.

Employees with CBAs

Some employees enter employment under collective bargaining agreements (CBAs), which tightly restrict working hours, pay rates, benefits, and other factors.

Employees Abroad

Most Canadian insurance covers Canadian residents while in Canada but will not cover Canadians working in other countries.

Additionally, employees abroad may be subject to other laws and employment regulations. For this reason, ICHRAs offer classifications for employees working overseas.

Satellite Employees

For employees working at additional or multiple locations for a business, ICHRA classes include designates for satellite employees.

Satellite employee classifications become necessary for employers providing benefits to employees who reside outside a given group plan’s coverage area or network.

Combination Classifications

For the purposes of compliance and benefit eligibility determinations, ICHRAs allow employers to combine employee classes when necessary to cover employees working in unique conditions.

Using ICHRA Employee Classifications

While ICHRA allows for up to 11 employee classifications, employers need not use them all. Use the ICHRA employee class guidelines to structure or restructure employee benefits offerings. This structure allows HR teams and HRIS software more organizational avenues and incentivizes your team.

Managing High-Performing Employees: 5 Ways to Retain Them

View our article for tips on retaining your quality talent and learn how they benefit the company in the long run.

Find Your Company’s Insurance Solutions With Group Enroll

Navigating the ins and outs of employee class designation and company benefits doesn’t have to be a hassle. With Group Enroll, employers can browse and compare policies from Canada’s top insurance providers.

Want to find out how Group Enroll can streamline your company’s insurance needs? Get started by filling out our online quote form, and let us know what types of employees you have. We will source quotes from several companies and send you the most competitive rates. You can also email us at [email protected] or address mail to 10 Great Gulf Drive, Unit 5, Vaughan, ON, L4K 0K7.

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