Part-Time Employees are no different from your regular employees. You need to withhold FICA from any amount they pay. It doesn't matter whether they are retired, have a full-time job elsewhere or only work one day a week. If eligible they will receive any overpayment of FICA back on their 1040 at the end of the year.
Here's a big one that is getting some employers in trouble. If a former employee returns as an 'independent contractor' to do the same job they were doing as an employee - they are employees. The IRS is targeting individuals who receive a W-2 and a 1099 from the same company in a given tax year.
The length of employment does not determine worker status. All employment taxes apply even if the individual only works one or two days, or even part of a day.
With part-time employees providing benefits is optional. You do need to cover yourself by having a written plan indicating which benefits apply to which workers. Generally, you do not need to pay for holidays or provide other benefits to part-time employees.
Some states may have special laws regarding payment of part-time employees so it is always advisable to check.
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