When people talk about full-time and part-time employment, they typically refer to work hours. But this isn’t the only difference between part-time and full-time work. You also have to consider numerous perks and benefits when picking your future place of employment. If you are an employer, however, you have to pay attention to regulations surrounding part-time and full-time employees or risk paying hefty fines.
What Is Considered Full-Time Employment?
It’s a common belief that full-time work includes anything between 30 and 40 hours, and this is generally true. The trick, however, is that federal law doesn’t regulate any classification of full-time and part-time workers, so every company can create its own policy and define full and part-time employees’ work hours for benefit eligibility. Therefore, a company can set full-time work at 30 hours per week and part-time hours at 25 a week if it suits its needs.
What Is Considered Part-Time Employment?
Some people prefer part-time jobs because they typically involve working fewer than 30 hours per week and frequently don’t have a set schedule. The two most significant differences between part-time and full-time employment are that part-time employees are paid hourly but do not receive the benefits and perks that full-time employees do.
Be aware that there is a significant distinction between part-time employees and independent contractors in how they go about their tasks and when it comes to taxes.
Why Is the Distinction Between Part-Time vs. Full-Time Employment Important?
Every employer is responsible for keeping track of how many full-time and part-time employees they have, as well as ensuring that each one receives the perks and benefits outlined in the employee handbook and to which they are legally entitled under the contract.
While federal law does not regulate the classification of workers as part-time or full-time, it applies to all employees or sets its own specific rules for the eligibility of employees.
Employer’s Obligations and Benefits Toward Full-Time vs. Part-Time Employees
In an effort to attract talent and boost retention, businesses offer various benefits to prospective employees, including health insurance, dental and vision insurance, 401(k) retirement plans, mental health benefits, disability insurance, and professional development.
Such benefits used to be available only to full-time employees, but with the competitive market, we’ve seen an increase in businesses offering said benefits to all hires, including part-time staff. Never assume you’ll be eligible for a benefit, though. Instead, inquire about it during the job interview to be on the safe side.
Federal and State-Regulated Benefits and Obligations
While some benefits are optional, others are mandatory and regulated by the federal government or the state.
The Fair Labor Standards Act
The Fair Labor Standards Act regulates the minimum wage, overtime pay, recordkeeping, child labor, and what constitutes working time. It applies to all employees, be they part-time or full-time, but it does classify workers as exempt and nonexempt employees when it comes to overtime pay eligibility.
Affordable Care Act
When it comes to the Affordable Care Act, also known as Obamacare, the law classifies all companies with at least 50 full-time employees and full-time equivalent employees as an Applicable Large Employer. All ALE classified companies have to provide their full-time employees with a minimum coverage health insurance plan.
Because full-time employee and part-time employee classifications aren’t regulated by federal law, a company’s and ACA’s classifications can differ. ACA considers an employee who works at least 30 hours per week or a total of 130 hours per month as a full-time employee, even if the company doesn’t classify it as such.
In order to avoid confusion and mistakes that can lead to fines, many businesses follow the ACA classification for full-time workers even though it isn’t required by law. As per the ACA, they are considered full-time workers only for the purposes of calculating if the company is an ALE and providing minimal health insurance.
Counting full-time employees is only one part of the ALE calculation. To see if a company can be classified as ALE, you also have to take full-time equivalent employees into account. All other workers with fewer hours than 30 hours per week or 130 hours per month go into this pool. Their monthly time is combined and then divided by 120. The result represents full-time equivalent employees. When you combine full-time and full-time equivalent employees, you can see if a company is classified as ALE, and this has to be done each month.
The Family and Medical Leave Act
The Family and Medical Leave Act, just like the ACA, applies only to companies with 50 employees or more. Whether they are full-time or part-time employees, all workers have the right to request an unpaid leave of absence in the event of a birth, if they are given custody of a child, to care for a family member, or if they are suffering from a long-term illness.
In order to qualify for FMLA leave and protection, an employee must have been with the company for 12 months and worked at least 1,250 hours during that time.
Medicare and Social Security
While many believe they are the same thing, Medicare and Social Security are two separate obligations introduced by the Federal Insurance Contribution Act. Both aim to improve the lives of retired or disabled Americans who have paid the same tax for at least a decade. This obligation is shared by the employee and the employer.
This one squarely lies on the shoulders of the employer, and it’s paid out from the Unemployment Tax Fund in cases of wrongful termination and staff layoffs. Unlike most other obligations and benefits, this one is regulated at the state level because each state has a different base wage used for calculation. Businesses are required to pay unemployment insurance for every part-time and full-time employee.
Workers Compensation Insurance
Workers’ compensation insurance is one of those benefits you are glad exists but also hope you will never need. It’s mandatory in one form or another in all states except Texas, where it’s a benefit an employer might offer. It covers various work-related injuries, treatment, and death benefits in the worst-case scenario.
The Difference Between Full-Time and Part-Time Employment
In the end, the main difference between the two types of employment is the work hours and benefits offered.
|Working hours per week||30-40||Below 30|
|Benefits||All||From all to none|
|Covered by the FLSA||Yes||Yes|
Part-time workers also get to enjoy a little bit more free time and typically have more flexible work schedules compared to full-time workers, but they are also the first to go in case of layoffs. If a part-time worker isn’t a specialist brought in for a certain project, it also means that the pay is lower than what a full-time employee would receive.
Both types of employment are viable, and sometimes a part-time job is an entry-level position in the company. This allows both the employee and the employer to test the waters before committing to full-time employment.