Part-Time vs Full-Time Employee Classifications | TSheets
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Defining part-time versus full-time employee classifications

Why full- and part-time employee classifications matter and how they impact your employees and your business.

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Employers have to know how to classify their employees—as either exempt or nonexempt—to know who receives overtime pay. They need to know if the people working for them are contractors or permanent employees. And finally, they need to know if their employees are full-time or part-time workers.

Unlike the others, the Fair Labor Standards Act (FLSA) doesn’t define the full- or part-time classification. It’s largely up to employers to determine what defines a full- or part-time status. What’s the difference? And why does this classification matter? Let’s find out.1

The main differences between part-time and full-time workers

The biggest difference between full- and part-time employees is the number of hours they work. The FLSA doesn’t define that number. Employers set full- and part-time hours based on their company’s needs. 

Part-time workers typically work fewer than 40 hours per week. Some employers might define part-time employees as those who work fewer than 35 or 30 hours per week. While there are no federal regulations, certain laws and groups define full- and part-time workers differently. 

For example, the Affordable Care Act (ACA) says that full-time employees work, on average, 30 or more hours per week. The Bureau of Labor Statistics (BLS) defines full-time employees as those who work 35 hours or more per week. 

A nonexempt employee’s part- or full-time status does not affect their right to overtime pay when they work over 40 hours per week. Part- and full-time employees are equally entitled to federal or state rest and meal breaks, regardless of business break policies. The number of hours an employee works in one shift, not in one week, determines their breaks.

Why do part-time or full-time employee classifications matter?

The federal government does not recognize an employee’s part- or full-time status. The number of hours an employee must work to be considered a full-time worker is at their employer’s discretion. But most business owners use a worker’s full- or part-time status to determine benefits eligibility. Part-time employees may not be eligible for the same benefits as their full-time colleagues.

For example, the ACA requires most employers with 50 or more full-time employees to offer minimum essential health coverage or face penalties from the IRS. This is known as the employer mandate. The ACA doesn’t require employers to offer health insurance to part-time workers. 

Employers are not required by law to offer vacation pay, holiday pay, retirement plans, or other supplementary benefits to any employee. But they may choose to offer these benefits to full- or part-time workers. 

The exception is sick leave. Many state laws require employers to provide sick leave to employees who work a minimum number of hours per week. In most cases, that threshold is low enough to make most part-time employees eligible.

What is a full-time employee?

The FLSA does not define full-time employment, but other laws do. The ACA says full-time employees work at least 30 hours per week, or 130 hours per month, for more than 120 days per year. The BLS defines full-time employees as those who work 35 hours or more per week, simply as a guideline for reporting labor statistics.

Full-time employee benefits

With the exception of health insurance and sick leave, employers are not required by federal law to offer supplementary benefits to any employee. This includes vacation pay, holiday pay, retirement plans, and more. However, employees are entitled to a few legally required benefits.

  • Social Security and Medicare
    Federal law requires both employees and employers to contribute to these funds.
  • Unemployment insurance
    The Federal Unemployment Tax Act assists workers who lose their jobs with federal unemployment insurance. The federal government mandates state unemployment insurance programs, which state governments administer.
  • Workers’ compensation
    Workers’ comp insurance offers financial support for employees who are unable to work as a result of a work-related injury or illness. The federal government mandates workers’ compensation programs, which state governments administer.
  • Health insurance
    The ACA requires companies with 50 or more full-time equivalent employees to offer minimum basic coverage health insurance.
  • Family and medical leave
    The Family and Medical Leave Act entitles employees to up to 12 weeks of unpaid leave during a 12-month period for qualifying reasons.

Full-time employee holiday, sick, and vacation pay

Federal labor laws don’t require employers to offer holiday or vacation pay to any employee. Employers may choose to offer such benefits to full- or part-time employees. They may also choose to offer more paid time off to full-time employees than part-time employees. For example, full-time employees might earn 15 vacation days per year, while part-time employees earn five. 

Most states require employers to offer paid sick leave to employees who work a minimum number of hours. In most cases, that threshold is low enough that both full- and part-time employees are eligible. For example, in California, all employers must provide paid sick leave to all employees who work for them for at least 30 days. In Connecticut, employees, including part-time service workers, earn one hour of sick leave for every 40 hours worked.

As always, it’s important to understand which federal, state, and local laws apply to your business and full-time employees.

Full-time employee FLSA and DOL regulations

An employee’s full- or part-time status does not change the application of the FLSA under the Department of Labor (DOL). It’s essential to define the differences between full- and part-time work in your employee handbook and audit employee classifications regularly. For example, if a part-time employee works full-time hours consistently, you may need to reclassify that employee.

What is a part-time employee?

The ACA defines part-time employees as those working fewer than 30 hours per week, or 130 hours per month. And the BLS defines part-time employees as those who work fewer than 35 hours per week, for the purposes of reporting labor statistics. 

For the most part, it’s up to employers to define what part-time work looks like within their company. In general, part-time workers work fewer than 40 hours per week, but many employers set the threshold much lower.

Part-time employee benefits

Federal labor laws do not require employers to offer the same benefits to part-time workers as they do to full-time workers. For instance, part-time employees may not be eligible for health insurance, paid time off, or other fringe benefits. Part-time workers are still entitled to a few basic benefits, including Social Security, Medicare, unemployment insurance, and workers’ compensation.

Part-time employee holiday, sick, and vacation pay

Federal labor laws don’t require employers to offer holiday or vacation pay to any employees. Employers may choose to offer these benefits to full- or part-time employees. They may also choose to offer more paid time off to full-time employees than part-time employees. 

Many states require employers to offer sick leave to employees who work a minimum number of hours. And in most cases, the threshold is low enough to include part-time workers. As always, employers should familiarize themselves with federal, state, and local laws that may impact their business and their part-time workers. 

Part-time employee FLSA and DOL regulations

An employee’s full- or part-time status does not change the application of the FLSA under the DOL. Minimum wage and overtime laws apply to all employees, no matter their status. For example, a part-time worker might work 30 hours per week as determined by their employer. But overtime doesn’t kick in until they work more than 40 hours. 

Define the differences between full- and part-time work in your employee handbook and audit employee classifications regularly. For example, you may define part-time workers as anyone who works 30 hours or fewer per week. But if someone works 32 hours per week, you may need to reclassify them.

1Disclaimer: The content is intended to be informative and was accurate at the time of publication. It should not be relied on for tax, legal, employment, or accounting advice. You should consult your own tax, legal, employment, and accounting advisors before engaging in any transaction.