The HR Dictionary
The Fair Labor Standards Act (FLSA), according to the US Department of Labor, does not specify how many hours an employee must put in to be regarded as full-time. The IRS defines full-time employment as at least 30 hours per week, or 130 hours per month, on average, even though there is no legal distinction. Additionally, according to the FLSA, employees must be paid at least the minimum wage for all hours performed up to 40 per week. Any additional hours performed over the course of a week must be compensated at 1.5 times their regular hourly rate.
Full-Time vs Part-Time vs Independent Contractors
In order to determine who is eligible for benefits like retirement plans, paid time off (PTO), paid sick leave, and employee wellness programs, employers are typically free to establish their own definitions of full-time versus part-time employees. Full-time workers are typically those who work at least 32 hours a week, though some businesses may require more hours. Some highly flexible employers may not have any expectations about the number of hours worked by salaried employees as well.
On the other hand, a person who works for a company on an hourly basis for fewer than the typical full-time hours is considered a part-time employee. Depending on what makes sense for a company, the employer may decide to set that limit at 20 hours, 25 hours, or another number. While Federal regulations distinguish between a part-time employee and an independent contractor, they do not distinguish between a full-time employee and a part-time employee. In either situation, an organization might hire an employee and pay them by the hour to work for fewer than 40 hours per week. However, as for part-time employees, employers must pay some payroll taxes to the IRS as well as unemployment insurance tax to the state. For independent contractors, the taxes are not the employer’s responsibility.
Current HRM systems provide the ability to easily manage aspects such as leave, time tracking, payroll processing, and more for multiple types of employees such as mentioned above with custom policies unique to each type. It takes away all the hassle of having and managing a large blended workforce from the HR team.