There are many reasons to understand employee classification. Knowing if a worker is a full-time employee or a part-time employee will help you determine if you meet labor laws and what types of documentation you need to keep on hand. Before you hire your next employee, consider these facts about each type of work arrangement.
What is Part-Time Employment?
Traditionally, a part-time employee is understood to work less than 40 hours a week, which is the norm for a full-time employee in the United States. That’s not a hard rule, and some companies use the ACA guidelines of less than 30 hours worked per week or their own formula.
Hours aside, part-time workers generally have fewer consistently-scheduled hours and benefits than a full-time wage earner. In most states and industries, it is up to the business to determine what is considered part-time employment as long as the benefits, wages, and hours fall within the standards of the Fair Labor Standards Act (FLSA).
What is Full-Time Employment?
A 40-hour workweek is generally considered a full-time job, but it could be something far less than that, too. The Affordable Care Act (ACA) and the IRS state that a full-time employee is an employee who worked an average of at least 30 hours per week (or 130 hours per month) in any given calendar month.
This number may be much higher as well. Salaried employees, or exempt employees, have been known to work 40, 50, or even 50 hours per week as part of their work schedule. Because they are paid per month or year, they don’t follow all of the same guidelines as hourly, full-time (non-exempt) employees.
Full-Time vs Part-Time Employment
Whether you use the IRS, ACA, or your own internal memos to determine full-time vs part-time employment, there are some basic factors that define each:
Hours – As we mentioned above, part-time employment hours are generally less than 30 per week. Anything over that is considered a full-time workload.
Work schedule – While the hours can be scheduled for any combination of the total hours, full-time employees usually work more of their hours in longer, 8-hour shifts. Part-time employment hours may be scattered throughout the week and in smaller chunks to fill employment gaps as needed.
Pay – While you’re free to compensate your employees any amount above the minimum wage requirements, full-time employees make, on average, more than part-time workers. This doesn’t include additional compensation packages, bonuses, paid out vacation time or sick benefits, or other perks that may be paid as cash. These also help to create a bigger gap between part-time and full-time employees.
Benefits – Full-time employees are often mandated to receive more benefits, so it makes sense that they receive them more often. Part-time employee benefits exist, but they are usually not as generous as full-time employment benefits, which can include paid time off, college tuition reimbursement, health insurance, retirement packages, and flexible spending accounts. The value of these benefits should be added to an hourly wage or salary to find the true pay rate for either classification.
Job security – If a worker lives in a right-to-work state and isn’t protected by union contracts, he or she can be terminated at will, no matter the job classification. Part-time employees, however, are more likely to be let go before full-time workers, who often require more training and have had a more significant investment made into their onboarding. Part-time jobs are also more attractive to employees who isn’t looking for a dedicated career position, making them more likely to move on in search of something new.
Why Does Part-Time and Full-Time Classification Matter?
In addition to the differences discussed above, there are legal and industry requirements that come with each of the classifications. The Affordable Care Act (ACA), in particular, defines a full-time employee under its own rules and requires that employers offer certain health-care benefits to those who meet those benefits. The rules vary according to the size of your company, which is determined by the number of full-time workers you employ. If you fail to classify and count these workers correctly, you may be subject to stiff penalties and fees.
Pros and Cons of Part-Time Employment
Hiring part-time workers has its perks. The advantages of part-time employment include:
- Less expensive than a full-time employee because of fewer benefits, lower salaries, and lower overall administrative cost
- More consistent than hiring outside help, gig workers, or independent contractors
- More flexible and can fill employment gaps where and when needed
The disadvantages of part-time employment include:
- A less committed workforce that may not stick around as long because of smaller benefit packages and guaranteed work hours
- Not as professionally developed as full-time workers or those in higher positions
- Not always available for busy seasons or longer shifts as they value their part-time status
Pros and Cons of Full-Time Employment
Are you looking to bring on more staff? Here are the advantages of full-time employment:
- Generally more productive than part-time or gig workers
- Able to handle higher workloads and busy seasons due to their familiarity with the ebbs and flows of the business cycle
- Considerably more loyal with a desire for a long-term commitment
These workers aren’t best for all situations. Some common disadvantages of full-time employment include:
- More expensive to keep onboard than part-time workers who have lower wages and fewer benefits
- Less capable of managing work-life balance in times of stress or high production need
- Not as flexible to schedule changes and aren’t available for hourly scheduling cuts
Many jobs don’t require you to choose between full-time and part-time help. The nature of the work points to one solution, and you can hire accordingly. In the case where you can choose either and you aren’t sure which one best fits your needs, it’s possible to start with a part-time employee. This lets you see if they’re a good fit before transitioning the worker or position into a full-time arrangement. There’s nothing wrong with easing into the added expenses of a full-time employee over time, provided you follow the regulations for your industry.
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