Yes, part-time employees are eligible for 401(k) plans under federal law, and there are now two ways to qualify. The long-standing rule lets you in once you reach 1,000 hours of service in a 12-month period and are at least 21 years old. Starting with plan years that begin in 2025, the SECURE 2.0 Act added a second path: work at least 500 hours in two consecutive years and you can make your own contributions even if you never cross 1,000 hours. Your employer’s plan may be more generous than either federal minimum.
The 1,000-Hour Rule
ERISA sets the floor every 401(k) plan has to meet. A plan cannot require more than one year of service or an age above 21 to participate.1Office of the Law Revision Counsel. 29 U.S.C. 1052 – Minimum Participation Standards A “year of service” is any 12-month period in which you complete at least 1,000 hours of work. The clock usually starts on your hire date.
If you don’t reach 1,000 hours in that first 12 months, the plan can switch to measuring your hours by the plan year, which is often the calendar year, instead of your work anniversary.1Office of the Law Revision Counsel. 29 U.S.C. 1052 – Minimum Participation Standards A part-time schedule of about 20 hours per week will get you to 1,000 hours in roughly 50 weeks.
Meeting the age and hours test doesn’t mean you start contributing the next day. Federal law allows the plan to delay your entry by up to six months after you qualify, or until the first day of the next plan year, whichever comes first.2Office of the Law Revision Counsel. 26 U.S.C. 410 – Minimum Participation Standards Hit 1,000 hours in July under a calendar-year plan, and you should be enrolled no later than the following January 1.
The 500-Hour Rule for Long-Term Part-Time Workers
Before the SECURE Act of 2019, part-time workers who stayed under 1,000 hours year after year had no guaranteed way into a 401(k). That law created a new category of “long-term, part-time” (LTPT) employee: originally, anyone who completed 500 hours in each of three consecutive 12-month periods became eligible to make salary deferrals, with the first group entering plans in 2024.3Federal Register. Long-Term, Part-Time Employee Rules for Cash or Deferred Arrangements Under Section 401(k)
SECURE 2.0 then cut the three-year wait down to two. The shorter timeline applies to plan years beginning after December 31, 2024, so it is fully in effect for 2025.4Office of the Law Revision Counsel. 26 U.S.C. 401 – Qualified Pension, Profit-Sharing, and Stock Bonus Plans You still need to be at least 21 by the end of the second qualifying 12-month period.
The same framework now reaches 403(b) plans that are subject to ERISA. For plan years after December 31, 2024, qualifying part-time employees at schools, hospitals, nonprofits, and other 403(b) sponsors have the same right to make salary deferrals.5Internal Revenue Service. Notice 2024-73 – Additional Guidance on Long-Term, Part-Time Employees
What LTPT Status Gets You, and What It Doesn’t
The LTPT rules guarantee one thing: the right to put your own money into the plan. They do not force your employer to match your contributions or make nonelective contributions on your behalf, even if other employees in the same plan receive those benefits.3Federal Register. Long-Term, Part-Time Employee Rules for Cash or Deferred Arrangements Under Section 401(k) SIMPLE 401(k) plans are the exception: they must provide their required employer contributions to LTPT employees on the same terms as everyone else.
If your employer does choose to offer a match to LTPT workers, it will typically be subject to a vesting schedule, so you’ll keep the full employer contribution only after a set number of years of service.
Vesting Credit for Part-Time Service
Vesting determines how much of the employer’s contributions you keep when you leave. Your own salary deferrals are always 100 percent yours. Employer contributions usually vest over several years, and under the standard rule a year counts toward vesting only if you work 1,000 hours in it.
SECURE 2.0 fixed the vesting problem for part-time workers by requiring plans to credit LTPT employees with a year of vesting service for each 12-month period in which they work at least 500 hours. Only periods beginning on or after January 1, 2023, count.5Internal Revenue Service. Notice 2024-73 – Additional Guidance on Long-Term, Part-Time Employees A part-time worker hired in 2018, for example, starts banking vesting credit from 2023 forward.
Automatic Enrollment at Newer Plans
If your employer started its 401(k) or 403(b) plan after December 29, 2022, you may be enrolled without lifting a finger. SECURE 2.0 requires these newer plans to use automatic enrollment for plan years beginning after December 31, 2024.6Federal Register. Automatic Enrollment Requirements Under Section 414A The default contribution starts between 3 and 10 percent of your pay and increases by one percentage point each year until it reaches at least 10 percent, with a ceiling of 15 percent. You can opt out or change the rate at any time.
Several categories of employer are exempt from the auto-enrollment requirement: plans established on or before December 29, 2022; employers that have never had more than 10 employees; businesses that have existed for fewer than three years; government and church plans; and SIMPLE 401(k) plans. If you recently became eligible at a newer employer, it’s worth checking your pay stubs. You may already be contributing.
Who Can Be Excluded Regardless of Hours
Hours aren’t the only thing that determines access. Federal law lets plans exclude two groups based on their status rather than their schedule:2Office of the Law Revision Counsel. 26 U.S.C. 410 – Minimum Participation Standards
- Union-represented employees, where retirement benefits were the subject of good-faith bargaining with the employer. The union often provides a separate plan or pension.
- Nonresident aliens with no U.S.-source income.
If you fall into one of these categories, the LTPT rules won’t open the door to your employer’s 401(k).
How to Confirm Your Plan’s Specific Rules
Federal law is the minimum. Many employers set friendlier terms, allowing part-time workers to join after a few months or even on the first day of employment. The document that spells out your plan’s actual rules is the Summary Plan Description (SPD), which your plan administrator has to provide within 90 days of your becoming a participant.7Office of the Law Revision Counsel. 29 U.S.C. 1024 – Filing With Secretary and Furnishing Information to Participants and Beneficiaries You can also request it from HR at any time.
The SPD will tell you the eligibility waiting period, the entry dates when new participants can start contributing, the vesting schedule for any employer money, and the available investment options. If you think you qualify and haven’t been enrolled, the SPD is the first place to look, and the document you’ll point to when you ask the plan administrator why.