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I believe that companies can't offer more favorable options for 401Ks - say, a higher match, for some individuals over others. They have to follow their plan documents, so that's not a negotiation point.

What I'm wondering is if inclusion in a 401K is something that is possible to negotiate. Say a company offers a 401K to all full-time employees, but I am working 32 hours a week. Could I negotiate with my employer to be offered inclusion in the plan? Or is this also a non-starter legally?

  • Are you the only part-time employee? Or are there others that would be included? Including some part-time employees and excluding others would likely be problematic from a legal perspective, the company would need to amend their plan documentation to allow all those working 32 or more hours in. – Justin Cave Jun 2 '14 at 22:42
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    That should be tagged united-states. – Étienne Jun 3 '14 at 6:39
  • why it is not about the united states it is about a 401k benefit. The fact that 401k is a US Specific thing is irrelevant. – IDrinkandIKnowThings Jun 3 '14 at 13:29
  • I worked for a company that didn't allow participation until after the first year. Another part of their policy was you must be an employee for one year as of Jan1 9a holiday). My boss pushed like crazy to make sure my hiring date was Jan 1; otherwise I'd have to wait another year. Always ask and push when necessary. – user8365 Jun 4 '14 at 1:21
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Technically anything legal is negotiable and I have worked in companies where 401ks and 403bs are available to non-full time employees.

Therefore it's safe to say there is no legal reason to deny you access to the 401k which means it's entirely a negotiable point. (I'd actually be impressed by someone fighting for 401k access, that implies they're going to try and stick around long term and are financially sound enough to set retirement as a reasonable priority.)

Of coarse whether they are willing to offer the access in negotiations depends on how much they want you, but hey only one way to find out...

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    The only sticking point I could see is the match vesting. If they have a schedule of vesting that was intended to apply to full time people as an incentive the plan my require that though they will probably not want to vest a part time employee or even match them. – IDrinkandIKnowThings Jun 2 '14 at 21:15
  • It's negotiable. But it's probably only negotiable in the sense that the company would have to open up the 401(k) to everyone working 32 or more hours per week, not just to the original poster. – Justin Cave Jun 2 '14 at 22:43
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What I'm wondering is if inclusion in a 401K is something that is possible to negotiate. Say a company offers a 401K to all full-time employees, but I am working 32 hours a week. Could I negotiate with my employer to be offered inclusion in the plan? Or is this also a non-starter legally?

Yes. It is negotiable.

A lot may depend on the type and size of the company for which you work.

My wife joined a company of 4. One of the terms of employment she insisted upon was immediate inclusion in their 401k plan. She also works 32 hours per week.

After a bit of negotiation, it was granted.

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Tricky part is to make your benefits match your efforts. I've seen a company advertising "full time, part time and 0.8 positions are available". I assume that as 0.8 == 80% position (32 out of standard 40 hour week) you will get 80% of the benefits: 80% of your match for 401K, 80% of company match, 80% of accumulation of paid time off etc.

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If the company has a policy that says that automatic deposits in a retirement account are only for 40-hour personnel, you can probably assume they have that policy for a reason. For example, the plan as set up with the investment firm may specify a minimum number of hours and also a minimum tenure for employee eligibility. Or maybe the company views this as a perk for full-time employees, since it requires some administration and accounting on their part. It is likely spelled out in an employee policy manual, which makes it even less likely that it is negotiable, since making exceptions to the policies in a company's employee manual would affect its effectiveness overall.

There is nothing to say you can't ask, though. And there is also nothing keeping you from setting up your own 401K and moving money from your bank account into it every month.

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I'd say it never hurts to ask, but be prepared for a "no".

I would strongly suspect you will have a lot more traction if you are the first part-time employee ever to work for them (or to work in a given role) vs. the 200th. If you are setting the precedent for how a part time person gets paid, you probably have some leeway. If a certain pattern has been set, then changing the pattern is likely to be more expensive in some way than the value of hiring you, specifically, vs. finding someone who doesn't care about the 401K program.

I doubt there are any straight up legal issues of "we simply can't compensate part time people this way", but there could be issues of "if there is a blanket policy for how people are compensated, then you cannot treat people out of alignment with that policy without revising the policy for everyone". There's always a provision for variance in pay (to a point) but it's likely that many companies have written blanket policies of "we give part time people at x hours these Y benefits".

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