If you’re researching what constitutes full-time and part-time hours, you’ve likely run into different definitions in different places. Employers are generally able to develop their own definitions. And with conflicting definitions floating around, it makes it hard to know what’s correct and what’s not.
You may have several types of workers on your team, including:
Statutory employees and non-statutory employees
So, what is the difference between full-time and part-time employees in the United States? How many hours is full-time and how many hours is part-time? And what are the consequences for employers if they don’t get it right the first time around?
Whether you’re an employee or employer looking for the best definitions of full-time and part-time workers, these classifications have far-reaching implications both in health insurance options and other coveted benefits.
Short answer: Full-time employment is usually considered between 30-40 hours a week, while part-time employment is usually less than 30 hours a week.
Long answer: The answer is not quite as simple as it sounds. Here’s why. The Fair Labor Standards Act (FLSA) has no definition for part-time or full-time employment, and employers may determine their own definitions. However, according to the IRS, for purposes of the Affordable Care Act (ACA), the following definition is used:
A full-time employee is, for a calendar month, an employee employed on average at least 30 hours of service per week, or 130 hours of service per month.
According to the US Bureau of Labor Statistics (BLS):
Full-time employment is usually 35 hours or more per week
Part-time employment is usually 1 - 34 hours per week
These definitions are more of a guideline than a rule, it’s important for you to clearly state in your Employee Handbook which guidelines you follow when defining full-time vs part time employees within your organization.
Just like full-time employees, you may choose to pay your part-time employees by the hour or via salary. Their rate of pay is generally equivalent to full-time salaried employees but on a prorated basis. For example, a part-time salaried employee who works three days a week will make 60% of what a full-time salaried employee (who works five days a week) with the same responsibilities takes in.
People who work for you on a full-time basis will likely receive a broad range of benefits. Many businesses also choose to offer benefits to part-time employees, though on a limited basis. For example, you may opt to offer paid time off to full-time workers but not to those who work part-time. Insurance benefits for part-time employees may also be limited.
You also have to pay the same types of taxes for part-time employees as you do for full-time workers. To learn how to correctly classify interns, volunteers, temporary workers and more, check out our handy guide.
An employer may inadvertently misclassify a worker as part-time, when in fact, the employee is classified as full-time under the ACA. This could cause benefits-related penalties for the employer. For example, if an Applicable Large Employer (ALE) under the ACA should offer benefits to a full-time employee but does not, the company may face fees or penalties.
The number of part-time and full-time employees a company has affects whether the employer is classified as a small employer (SE) or applicable large employer (ALE). SEs and ALEs have different obligations. If an employer has an average of at least 50 full-time employees or equivalents, then the employer is an ALE.
An ALE must offer minimum essential benefits coverage that is affordable and provides minimum value, or potentially make an employer shared responsibility payment to the IRS. ALEs also must file certain informational returns with the IRS, such as Form 1095-C. SEs do not have the same responsibilities as ALEs. You can read more about what the ACA requires of small businesses here.
Although full-time and part-time hour classifications can feel a little murky, some ALEs choose to stick by what the ACA defines as full-time workers to avoid penalties. Additionally, employers may use other definitions besides full-time and part-time for the purposes of other benefits. If you’re unsure as an employer how to define part-time and full-time, or need guidance on how to stay compliant with the ACA, it never hurts to reach out to employment counsel.
Keeping up with your various worker and employee types, and making sure everyone is paid correctly and on time, is no easy feat. For small businesses, using streamlined HR and payroll solutions like Justworks can be a game-changer.
Justworks PEO and Justworks Payroll can both help you automate payroll for your business and manage your people. If you're looking for more robust HR support, Justworks PEO customers get access to a suite of HR tools and services — plus access to benefits to help you take care of your team. Isn't it time you got the support you need? Get started today.
Monthly tips on running a business in your inbox.
Justworks is a technology company that levels the playing field for all small businesses. Through our software and as a partner, we help our customers take care of their teams, streamline their operations, and navigate the complex aspects of managing a workforce with confidence.
Scale your business and build your team — no matter which way it grows. Access the tools, perks, and resources to help you stay compliant and grow in all 50 states.