What is an Employee Class?

An employee class is a category of employees which is used to group employees based on job-related criteria, such as job titles or departments, pay scale, or branch in corporate hierarchy. When it comes to benefits, they may also be used to offer different coverage. 

For example, a business might wish to provide their employees working in a dangerous profession additional Life, Accidental Death & Dismemberment (AD&D), or Disability Insurance, due to the dangerous nature of their job. However, this can be deemed less necessary for office workers in the same company.

What Are the Different Employee Classes?

Some of the most common employee classes are:

  • Salaried
  • Full Time Hourly 
  • Part Time 
  • Executives/Management
  • Regular Employees
  • Employees who have worked a specific number of months or years
  • Union Employees
  • Non-Union Employees
  • Seasonal Employees
  • Contract Employees
  • Independent Contractors
  • Employees on a Work Visa
  • Retirees
  • Volunteers

It is important to note that some employees may fall under more than one of these categories.  Companies should structure their employee classes depending on the type of employees they currently have and the reason they are classifying them as such. 

Class Distinction For Employee Classes

One of the reasons for separating employees into different groups is that businesses can employ different tiers of benefits to them and entirely different benefits packages can be implemented for each employee class. 

On the other hand, if an employer wishes to provide the same group benefits to all their employees, regardless of their classification, they can do that as well.  There is no rule that says you have to separate employees into different groups. 

Important Considerations For Some Employee Classes

1. Independent Employees

These should be classified for benefits according to their station or role at the company. Employers need to make sure that the employee’s and their dependents’ benefits are in the same bracket and no difference in treatment should occur.

2. Employees on a Work Visa

Most Long-Term Disability insurers will not provide coverage for employees on a work visa of less than two years.  This is due to the elimination period that must be satisfied in order to receive the benefit. For this class, they need to be put into a specific class for their benefit plan.

3. Union vs. Non-Union

When you add a Collective Bargaining Agreement (CBA) variable to your employee benefits the complexity rises further.  Employers should always separate employee classes by this trait, to ensure that they are able to follow the CBA rules.

4. Changes In Eligibility

It is important for employers to ensure that the employee is still in the correct employee class for benefits when role changes occur.  A promotion, a change in salary or job title, or even the length of time an employee has served can all be an indication that they may be eligible for a switch.