How Many Hours Do You Have to Work to Be Eligible for a 401(k)?

Saving for retirement is an important financial goal, and a 401(k) plan can be a valuable tool for long-term savings. However, not everyone qualifies automatically. Eligibility depends on factors like hours worked, employment status, and company policies.

Standard Hour Requirements

Federal law, specifically the Employee Retirement Income Security Act (ERISA), sets the baseline for 401(k) eligibility. Employers must allow employees to participate after completing one year of service, defined as working at least 1,000 hours within a 12-month period. This equals roughly 20 hours per week, though full-time employees typically reach this threshold much sooner.

Employers track hours over a designated 12-month period, usually starting from the hire date. Once an employee meets the 1,000-hour requirement, they must be allowed to enroll at the next available entry date, often the start of a new quarter or plan year.

Some companies impose a waiting period even after the hour requirement is met. ERISA permits employers to delay enrollment for up to one year, meaning an employee who reaches 1,000 hours in six months may still need to wait until their anniversary date to join. Once eligible, employees can contribute and receive any applicable employer matching contributions.

Part-Time and Seasonal Employees

Historically, part-time and seasonal workers have had limited access to 401(k) plans, but recent legislative changes have expanded eligibility. The SECURE Act of 2019 required employers to allow long-term part-time employees to enroll if they worked at least 500 hours per year for three consecutive years.

The SECURE 2.0 Act, signed into law in 2022, shortened this requirement. Starting in 2025, part-time employees will qualify after two consecutive years of at least 500 hours annually. Employers must track hours to ensure eligible workers can enroll.

Seasonal employees, who often work for short periods, may still struggle to qualify unless they return each year. If a seasonal worker logs 500 hours annually for the required period, they must be allowed to participate. However, those who work only a few months without reaching the hour threshold will likely remain ineligible.

Employer Differences in Eligibility

Companies have flexibility in structuring their 401(k) plans, leading to variations in eligibility. Some require a minimum age—typically 21—before employees can enroll. Others set specific enrollment windows, meaning even if a worker meets all criteria, they may have to wait until the next designated entry period, often quarterly or annually.

Matching contributions and vesting schedules also vary. Some companies offer immediate matching funds, while others require employees to complete a certain tenure before fully owning employer contributions. A common approach is graded vesting, where ownership increases incrementally over several years. For example, a company might allow 20% vesting per year, requiring five years for full ownership of employer contributions.

Industry-specific factors also play a role. High-turnover sectors like retail and hospitality may structure plans to limit short-term worker participation. In contrast, companies in competitive fields such as technology and finance often provide more inclusive retirement benefits to attract and retain talent. Government contractors and nonprofit organizations may offer 403(b) or 457 plans instead of traditional 401(k)s, each with its own eligibility rules.