Employment. It is needed to make a living in life. It is also needed by companies to make sure that their businesses continue to thrive. In the United States, there are projected to be over 163 million people in the labor force by the end of 2022. The labor force has grown by about 8.5 million people over the last decade. However, these 163 million people are not all the same type of employee. You have full-time employees, and you have part-time employees. When it comes to full-time vs part-time employment law, this is a very important distinction for companies to make.
It can affect who they hire, how many people they hire, and what type of pay and benefits they have to give out.
So, what are the most important things that you need to know about the different types of employment law? This is your guide to finding out.
What Is a Full-Time Employee?
A full-time employee is any employee that meets the minimum amount of hours of work per week or month. For this, an employee would qualify for full-time status if they worked for 30 hours per week or about 130 hours per month.
However, the amount of hours in a given period is not the only way to determine full-time employee status. Employers can use something called the look-back method. This method is used to measure an employee’s stability, and it is compared to the employee’s previous period of pay.
If an employee qualifies as a full-time employee, they are then due minimum essential coverage for a company to avoid liability responsibility. This mainly applies to companies that are determined to be an ALE (Applicable Large Employer). The main way that companies get this designation is if they have 50 or more employees that qualify as full-time employees.
What Is a Part-Time Employee?
Contrary to the above, a part-time employee is an employee that does not meet the minimum requirements of a full-time employee. They are employees that work, on average less than 30 hours per week.
These types of employees are very likely to be students, people that are semi-retired, people that are not the breadwinner in their household, or people that are working multiple jobs. In other words, they are not the main provider for their household, or their job is not their only source of income.
In the case of a student, they could be working part-time so that they can focus the rest of their time on doing well in school.
Affordable Care Act
One of the biggest things that you need to know to understand what full-time employees are eligible for is called the Affordable Care Act. The ACA, otherwise known as Obamacare, was established in 2010 to help more people get the health insurance that they needed.
So, what does this have to do with full-time employees? For those that have lower income, it means that they have to pay fewer deductibles on their healthcare expenses than they did before this act was enacted.
The ACA also makes every insurance plan that is sold in the marketplace cover certain minimum essential health benefits. These include but are not limited to:
- Ambulatory patient services
- Emergency services
- Family planning
- Laboratory services
- Mental health and substance use disorder services
- Pregnancy, maternity, and newborn care
- Prescription medications
- Preventive and wellness services and chronic disease management
- Pediatric services
- Rehabilitative and habilitative service
That is why companies need to know who is a full-time employee and who is a part-time employee. If a company has someone that technically qualifies as a full-time employee and the company itself is considered an ALE, then they are going to have to find a health insurance plan that meets these requirements.
Fair Labor Standards Act
Another act that you need to know about as a company is the FLSA (Fair Labor Standards Act). What this is is the act that sets the guidelines for how much you need to pay your employees, when employees are eligible for overtime pay, how much pay you need to give those employees in overtime, and more.
The federal minimum wage as of 2009 is $7.25. However, depending on what state your business is located in, this could be higher if you operate in that location.
As for overtime, the main rule here is that any employee that works more than 40 hours per week in an hourly rate role must be given overtime pay. In this case, they would be expected to make at least 1.5x what their typical hourly rate is for every overtime hour that they work.
Along with setting minimum wage and overtime minimums, this act also discusses child labor laws. Essentially, anyone that is under 16 years old must follow these guidelines. This essentially gives younger children limitations on how many hours they can work in a week.
These limitations vary depending on what type of industry the child is working in. Let’s use grocery store employees as an example.
The youngest person that a grocery store can hire is someone that is 14 years old. Employees that are 14 or 15 have their employment centered around their school schedule.
This means that they can only work three hours per week on school days during the school year. They can also only work 18 hours per week during the school year and eight hours per day on the weekends. During the school year, they can also only work from 7 a.m. to 7 p.m.
Pros of Full-Time Employees
So, what are the pros of having full-time employees around? For an employer like yourself, you are much more likely to know what you have with that employee.
You know that they are committed to your company and that this is most likely their main source of income. As an employer, you have the chance to have someone more dependable in this role and there is less chance of having high turnover in that position.
Also, full-time employees are putting in more time to learn about the company. This means that you can give them more responsibility and you can have these types of employees wear multiple hats within your company.
As for the employees, the main pro of being full-time is security. You are very likely going to get offered benefits such as health insurance and paid time off that are not typically offered to part-time employees.
Also, because you are working more hours than a part-time employee, you are very likely going to be taking home a larger amount of money from your job. This means that you can either upgrade your lifestyle or put money away towards savings or investments.
Pros of Part-Time Employees
Going off of the section above, there are benefits of having part-time employees around too. For employers, the main pro is that you do not have to commit nearly as many resources to them.
Because they do not meet the minimum requirements to receive healthcare coverage from you, this is one less employee you have to worry about matching benefits and finding a good insurance plan for.
Also, when part-time employees want to take time off, they are not going to be eligible for paid time off. This means that when they are off of the clock, it is not coming out of your pocket. With full-time employees, you could be paying them even if they are not on the clock.
On the employee’s side of things, the main pro here is that they have less responsibility and less time that they need to dedicate to the company. These employees are likely less stressed because they do not feel the pressure of being all-in with the company.
They can focus on other projects that they might have, students can focus on schools, and people near retirement that are just looking for extra pocket money can enjoy the next chapter of their life.
Also, part-time employees can gain experience in a company or an industry without the need to go all-in. They can decide if it is something that they would want to pursue or if they feel the need to move on to something else before they are too committed to your company and industry.
Cons of Full-Time Employees
Of course, with all of the benefits that both types of employees bring, there are downsides to each one. Let’s start with the downsides of full-time employees with employers.
As mentioned above, employers have to give full-time employees a reason to stick around and a reason to work longer hours. This means that they are likely going to have to spend a lot more money on employees’ salaries plus benefits.
If you know healthcare costs in America, you know that health insurance is not cheap in this country. From an employer’s perspective, they are financially chipping in for every full-time employee’s health insurance plan.
Employers that are considered ALEs can end up with a significant financial cost if they have to cover that many employees.
As for employers, the main con here is that they are most likely not going to have time to do anything else to earn money. They can end up feeling like they are stuck in one place and that they are losing out on time to spend with their friends and family.
Going along with the above, employees that end up working 35-40 hours per week or more all of a sudden could start to burn out. They may not be able to handle the increased workload from a part-time status and they may begin to feel overwhelmed.
This can damage an employee’s mental health and also damage their confidence in their ability to do the job for your company. On the employer’s side of this, this is also a con for them because when this happens, they are not likely to get the quality production from that employee that they may have gotten in the past.
Cons of Part-Time Employees
As for part-time employees, the main cons are that they are not receiving benefits that they may need such as healthcare or paid time off. Also, employees may not feel like they have the job security to retain their positions or to move up within the company’s ranks.
An example can be if you are working as a cashier in a big chain. You could feel like you can get fired at any time and you may not feel like there are a lot of opportunities to move up any higher if there is only one supervisor and manager.
On the employer’s side of things, the main con here is that you are not likely to get the commitment level from a part-time employee that you desire. This is because, in theory, they already have one foot out the door.
Part-time employees are less likely to go all-in on company culture and they are not going to put in the time at your company to learn the ins and outs as a full-time employee would. This makes them people you can’t rely on as often, thus resulting in you trying to find more people that are reliable.
However, this puts added stress on you because it can result in higher turnover for your company and constantly having to train new staff to get them on the level of the old employees.
Learn More About Full-Time vs Part-Time Employment Law
So, as you can see above, there are major differences between full-time vs part-time employment law. Your company needs to decide what commitment level they want from employees, how many hours they need from them, and if they can offer the benefits that full-time employees require.
But, what if this status determines if a workman’s compensation is on the table? Do you need to know more? Get a quote on that from us today.