What's the difference between a full-time employee and part-time employee? In this guide, we'll break down the main differentiator—hours.
Defining “part-time employees” isn’t as simple as it seems.
There are a lot of gray areas that can be confusing and lead to misclassifying your employees. And not classifying your employees correctly can lead to tax and legal nightmares.
We don’t want that to happen to you.
Hence, we’re here to help you understand the core differences between part-time and full-time employees, and share what part-time employees are entitled to receive from you as their employer.
According to the Current Population Survey published by the U.S. Bureau of Labor Statistics, part-time employees generally work less than 35 hours per week. But that time can vary depending on how an employer defines full-time hours, where the business is located, and company policies.
If you’re planning to hire global talent, you should first determine how you will define the minimum number of hours a full-time employee should work, then set the hours for part-time employees below that minimum.
It can be trickier to provide a clear picture of what part-time vs. full-time employment looks like for a global team compared to U.S.-only teams.
Human resource management laws and policies vary greatly from one country to the next. This means you have to think carefully about the hours your team works, the benefits they receive, and how to handle overtime requests to ensure you’re not misclassifying employees.
We’ll hit on the main variables to monitor here.
Each country has general guidelines for defining a full-time employee. For instance, if your employees are living and working in South Africa, the Basic Conditions of Employment Act states that your full-time employees shouldn’t work more than 45 hours per week. Any time worked over that amount would be considered overtime and should be paid accordingly.
But if you’ve ever watched Emily In Paris (the Netflix series loosely based on a marketing associate’s work life in France), you’d have noticed that France has a more relaxed approach to full-time work hours. In fact, France has a legally mandated 35-hour work week for full-time employees.
In the United States, the IRS defines a full-time employee as someone who has been employed to provide on average at least 30 hours of service per week, or 130 hours of service per month.
Clearly, the laws on hours of work for both categories of employees differ greatly across countries. The issue is so complex that even the Fair Labor Standards Act (FLSA) in the U.S. doesn’t provide an official definition for part-time vs. full-time hours.
Start with the labor laws in the country where your business is registered. This should become the baseline you use to establish the number of hours for your full-time and part-time employees. From there, adjust as needed based on where you plan to hire global employees from.
Put simply, part-time employees don’t receive the same benefits as full-time employees. Still, there are laws in countries such as the U.S. that mandate benefits for employees regardless of the number of hours worked.
For instance, part-time employees may be entitled to retirement benefits and unemployment benefits depending on the US state where they live and work. There can be serious legal implications if employees don’t receive the minimum benefits to which they’re entitled.
In the U.S., the Affordable Care Act (ACA) stipulates that healthcare should be provided to all employees who work at least 30 hours per week. Depending on how you define part-time employees internally, this stipulation may include your U.S.-based part-time employees.
Because of how complex benefit mandates can be from one location to another, your best bet is to use a global employee benefits management platform like Panther that’ll tackle the heavy lifting and compliance side for you.
The Fair Labor Standards Act (FLSA) governs how overtime hours should be handled within the U.S. in particular. It’s also a good frame of reference to use for developing your company’s overtime policies.
“Employees covered by the Act must receive overtime pay for hours worked over 40 hours in a workweek at a rate no less than time and one-half their regular rates of pay.”
One of the common mistakes employers make when considering overtime pay is refusing to actually pay overtime if it wasn’t pre-authorized. In the U.S., the FLSA makes it clear that employees should still receive overtime pay regardless of whether it was discussed and agreed on before the time was worked. That said, an employer can subject an employee to disciplinary action for failing to pre-authorize the overtime hours.
The big takeaway?
Overtime can get messy if you don’t clearly establish your systems and processes for managing potential overtime work. Ideally, those processes will include paying your part-time and full-time employees for any overtime they work.
Worker classification helps you designate the status of someone’s relationship with your company, and while these classifications go beyond part-time and full-time employees, this designation is one of the more common issues that arise.
The most important thing to remember is this:
If you misclassify employees, the penalties can be severe.
You could end up paying back taxes, including interest accrued over time, and penalties to the local government to account for the period of misclassification, or potentially barred from doing business in that country depending on the presumed intent of your misclassification.
Work with your HR manager to ensure all people who work for your business are correctly classified and payroll compliant.
The best way to avoid misclassifying employees globally is by understanding the specific employment and compliance requirements for each country you have team members in.
Of course, this is no easy task, especially as your team scales.
Rather than doing the in-depth research manually, you can use a platform like Panther to pass the responsibilities of managing compliance across hundreds of countries globally. We’ll tackle the compliance side, you focus on finding the best talent out there—full-time and part-time.