October 10, 2019 |
When hiring new employees, you will need to decide whether you’ll hire part time or full time workers. What identifies an employee as either part time or full time is based on the number of hours that they work throughout the standard workweek. How employees are paid can factor into how they are classified as well–employees that are paid an annual salary are almost always full time workers. Part time workers generally get paid an hourly wage. However, determining how many hours a week constitutes part time work or full time work can be challenging. This makes identifying employees as part time or full time not as clear cut as you’d assume.
However, it’s important that you are able to classify your employees as either part time or full time correctly. How you classify your employees affects their health insurance and benefits options. Also, misclassification can result in potential fines and penalties.
The Fair Labor Standards Act (FLSA), passed in 1938, is your guide for any employment matters. It contains numerous federal labor laws that protect the workers of this country, including minimum wage laws, overtime laws, working condition laws, child labor laws, and more. However, one thing that it does not clearly define is the difference between part time and full time work. The FLSA leaves it up to the employer to define whether an employee is working part time or full time.
Since the FLSA leaves the determination of what defines part time work up to the employer, it means you will classify your employees based on your policy. For example, if you have employees on your payroll that work 40 hours a week and are classified as full time, then you can’t classify new employees as part time if they are also working 40 hours a week since this is inconsistent with your work policy. Your employees classified as part time cannot work the same number of hours a week as your full time employees.
The Bureau of Labor Statistics classifies part time employees as anyone who works fewer than 35 hours during a one-week period. The IRS also has its own definition of part time work: employees who work fewer than 30 hours a week or fewer than 130 hours a month are part time workers. These determinations are not legal requirements and can simply be used as guides for determining part time hours by employers; however, the IRS applies its definition to employers with 50 or more employees to determine if employers are subject to the Affordable Care Act.
Part time positions are available in all industries. However, the industries that traditionally have the highest number of part time positions include hospitality, restaurant, and retail industries.
One of the reasons why it’s so important to properly classify your employees as part time or full time is because of benefit eligibility. If you have 50 or more full time employees, you are required to provide them with health benefits. You are not required to provide part time employees with benefits, even if you have over 50 employees at your company. If you have less than 50 employees, you’re under no legal obligation to offer benefits to either part time or full time employees.
Whether you classify your employees as part time or full time will also have an impact on whether they are considered exempt or non-exempt. For example, non-exempt employees are required to be given a 10-minute paid break for every four-hour work period in California. They must also be provided with a 30-minute meal break if they work longer than a five-hour day.
If you classify an employee as part time even though they are working full time hours simply because you don’t want to pay for their benefits, then you have misclassified them and will likely be fined or penalized as a result. Even if you don’t misclassify your employees as part time or full time on purpose, you will likely receive a harsh fine and other potential penalties. It’s why it’s so important that you classify your employees correctly.
Part time employees can work more than 40 hours in a week. However, part time employees are paid an hourly wage, which means that they are considered non-exempt workers. If non-exempt workers work more than 40 hours in a week, you are required to pay an overtime rate, which in California is either 1.5 or 2 times their normal wage rate depending on the number of overtime hours that they worked. If your part time employees are consistently working 40 hours in a week or more then they should be reclassified as full time employees and offered benefits.
There are a number of reasons why employers may be looking for part time workers in particular. Part time workers can often provide something of value to a company that a full time worker can’t. Here are a few examples of how hiring a part time employee can be an advantage for a business of any size:
Full time workers typically have an established schedule (which is where the term “9 to 5” comes from). This means that if there’s a period of time where business picks up and you need additional help, you can’t just reschedule your full time workers to cover those shifts. However, you can do this with part time workers. You can manage the hours of a part time worker on a weekly basis, which means you can schedule them for 15 hours one week and then 25 hours the next if you need to. This means that hiring part time workers can help provide your business with some extra flexibility in scheduling.
Hiring part time employees tends to be more affordable than hiring a full time employee. Even if you run a smaller company, you’ll likely offer your full time employees certain benefits. Most part time employees won’t be eligible for benefits so the cost of hiring them will be much lower. Since they are working less, you’ll pay them less than what you would pay for a full time worker.
If your company is growing at a fast rate, you’ll need more employees to handle the influx of business. Hiring full time employees may not always be the best idea since you may not know how much help you need and doing so can be expensive. Hiring part time employees instead can help lessen the burden on your current full time employees. Additionally, doing so can provide more flexibility in case your company suddenly stops growing so quickly. You can always offer your part time employees full time positions if they work out and you decide that more full time employees will benefit the growth of your company.
Classifying your employees correctly as part time or full time workers is important; however, there is no established legal standard for how many hours an employee must work to be considered part time or full time. This can make it a bit tricky. Make sure your classifications are in line with your company policy. If you have full time employees who are being paid salary and have a fixed schedule, you can’t classify new employees who work the same number of hours as part time. As long as you make your determinations fairly based on your company policy and not in a way to skirt the legal requirements laid out by the FLSA or the California labor code, then you should be okay.
Want to start hiring part time employees?