Full-Time vs. Part-Time Employees

There is no standard definition of “full-time” or “part-time.” Generally, you are free to determine the number of hours required for an employee to be considered full time versus part time. Some employers require employees to work 40 hours per week to be considered full time. Others designate as full time those employees who work as little as 24 or 32 hours. As a matter of convenience, you might choose to set the number of work hours required to be a full-time employee as the same number of hours your health insurer requires an employee to work to be eligible for coverage.

Employees who “job share” voluntarily split the hours and duties of a single job, prorating its wages and benefits. Job sharing raises many of the same questions as part-time employment.

• CalChamber’s Employee Handbook Creator ® can help you easily create an employee handbook that contains a sample job sharing policy. Purchase at the CalChamber store.

You can offer different benefits, such as vacation, or levels of benefits to full-time employees than you offer to part-time employees. Providing more benefits to full-time employees does not, by itself, create liability for illegal discrimination.

• If nearly all of your part-time employees who are denied benefits fall into one protected category and nearly all of your full-time employees with benefits do not, you may create the appearance of illegal discrimination.

Example: All of XYZ Corporation’s full-time employees are less than 40 years of age and receive full benefits, but nearly all part-time employees are more than 40 years of age and receive no benefits. XYZ Corporation may not intend to discriminate on the basis of age, but the company should consider that the benefit arrangements for its workforce create that appearance and could invite costly litigation.

Although there is no set number of hours an employee must work to be considered full time, the number of hours worked per week can affect whether an employer is subject to certain laws and whether the employee is eligible for certain mandatory benefits.

For instance, the Affordable Care Act (ACA) covers full-time employees working an average of 30 or more hours per week. Employees may be eligible for leave under the California Family Rights Act and Family and Medical Leave Act if they have worked at least 1,250 hours in the 12 months before taking leave. Be aware of the effect reducing hours has on mandatory benefits.

Consult your benefits adviser for guidance on the particular definition of “full-time employee” under the ACA.

Keep these things in mind when hiring part-time employees:

• Consult with your retirement plan administrator to determine whether part-time employees are eligible for your retirement plan.
• If they work a certain number of hours a week, part-time employees may count toward the threshold number of employees for purposes of the federal plant closing law, the Worker Adjustment and Retraining Notification Act (WARN). California’s WARN Act also counts part-time employees for the threshold. For more information, see Covered Employers.
• Normally, part-time employees are included in collective bargaining agreements.
• Determine whether a full-time employee who reduces their hours to part-time becomes eligible for continuing health benefits under COBRA or Cal-COBRA. For more information on COBRA and Cal-COBRA, see COBRA and Cal-COBRA.
• Check to determine whether an exempt employee who works only part-time meets the required salary threshold to remain exempt. For more information, see “Minimum Salary for Exempt Employees” in Determining Exempt or Nonexempt Status.
• You can provide different benefit levels to different levels of employees if the benefit is not withheld on an illegal discriminatory basis. Differentiating between part-time and regular employees is not illegal discrimination. You need only provide part-time employees with the benefits required by law, such as paid sick leave, workers’ compensation coverage or mandatory leaves for which they are eligible.

Short-Term Employees

You directly employ short-term employees, such as seasonal and specialized employees, for a limited period of time or an identified project. The law does not specify a duration of time after which a short-term employee becomes a regular employee.

Specialized employees are those who are brought in for a short time due to their expertise in a particular area. They may be hired to handle a project outside the employer’s normal realm, such as setting up a computer system or leading an employer’s efforts to rezone a piece of property on which it wants to build a new plant.

This discussion does not include temporary employees who are not directly employed by you, but instead hired indirectly through a staffing agency. For more information on these hires, see Non-Direct Hire.

There are a number of issues to consider before hiring short-term employees:

• Consult with your retirement plan administrator to determine whether short-term employees are eligible for your retirement plan.
• Short-term employees count towards your employee count for purposes of being covered by numerous laws, including California's Fair Employment and Housing Act (FEHA) and the California Family Rights Act (CFRA). For more information, see FEHA - California's Fair Employment and Housing Act, and California Family Rights Act - Overview.
• WARN counts short-term employees toward the minimum employee threshold in certain circumstances. California’s WARN law covers employers of 75 or more people, which includes temporary and seasonal employees.
• Short-term employees may be included in a collective bargaining agreement.
• You can provide different benefit levels to short term versus regular employees as long as it is not done on a discriminatory basis. You need only provide short-term employees with the benefits required by law. However, if you provide a short-term employee with health benefits, they may be entitled to rights under COBRA. For more information, see COBRA. Moreover, without careful planning, short-term employees may become eligible for employee benefits. For more information, see Benefits and Contingent Workers” on this page.
• If employees work an average of 30 or more hours per week, they are covered by the Affordable Care Act (ACA). For more information, see FThe Affordable Care Act