By Steven Austin Stovall
The lifeblood of your company is, of course, your staff. Your employees are on the front line every day, getting work done in an effective and timely manner. They vary in age, gender, experience and definitely personality. But they also may have some variance in their part-time or full-time status.
What at first would seem like a straightforward categorization of which associates work 40 or more hours and which ones work fewer is actually more nuanced than that. The following is both a refresher on rules regarding part-time and full-time workers and an introduction to the latest laws.
Part time vs. full time
A good starting point is to define an employee’s part-time or full-time status. As far as the U.S. federal government is concerned, there isn’t necessarily a legal definition of part-time employment. The overseeing law is the Fair Labor Standards Act and it doesn’t define this employment status. However, under a section of the Affordable Care Act that goes into effect in January 2014, consistently working fewer than 30 hours per week is considered part time. This means that if an employee works 40 or more hours every week, but one week works only 10 hours, then the employee still is a full-time associate because that single shorter workweek was an anomaly.
So, if there is no federal definition of part-time status, it’s generally up to the states and individual employers to set the rules. For example, most states specify that less than 35 hours is considered part time. There are some definite advantages to employers for having part-time workers—the most obvious being that it keeps labor costs in check because overtime pay likely will not apply to a part-timer. Another benefit is that it’s often easier to schedule a part-time worker to fill in holes in the schedule when they’re needed most. As far as employees are concerned, some prefer part-time status because it permits a greater degree of flexibility in their daily schedule.
Though the definition of part-time status may not necessarily be spelled out by the federal government, all employees—part time or full time—still are covered by U.S. laws concerning child labor, safety, work-
related injuries, harassment and discrimination. In addition, remember that employees who work more than 1,250 hours in a year are eligible for leave under the Family Medical Leave Act. Your state may have additional regulations that go beyond what federal rules mandate.
Taking a break
When it comes to breaks for both full-time and part-time employees, there are several things to keep in mind. Generally, federal law doesn’t mandate that rest breaks and meal breaks be taken. In California, Colorado, Kentucky, Nevada, Oregon and Washington, however, employees are entitled to a paid 10-minute break for every four hours worked. For all employees in most states, break time is figured into calculations for overtime pay.
Lunch breaks (30 minutes or longer), though, aren’t required to be paid and aren’t subject to inclusion in overtime computations. Just under half the states require a 30-minute lunch break if employees work a minimum of five or six hours a day. In 2012, the California Supreme Court found in favor of employers in how lunch breaks are administered. Prior to the case, employees put the onus of keeping them from working during a lunch break on the employer; therefore, if the employee chose to work during the break, she would be paid a full hour’s worth of pay, even if the “break” was only 30 minutes. The recent court case stipulates that employers do indeed have to provide a meal break, but don’t have to police what an employee is doing while on that break. In Delaware, employees who work a minimum of 7∂ hours get a half-hour lunch break. Generally, lunch breaks aren’t paid, but if your employees still are doing tasks while eating, you should compensate them for the lunch break.
Question of benefits
Benefits—health care, vision care, dental, vacation, sick time, gym memberships and so on—often are important recruiting tools and have been shown to retain employees longer when those benefits are especially, well, beneficial. There are, however, no federal laws requiring employers to offer those same benefits to part-time workers. The Affordable Care Act, for instance, applies only to full-time employees. Your company still may choose to extend these benefits to your part-timers as a sign of appreciation for their efforts, but it is not a federal requirement.
The only exception is if your business provides a retirement or pension plan. The Employee Retirement Income Security Act dictates that if an employee works 1,000 or more hours in a calendar year, that employee should be offered the same pension plan that full-timers receive. Otherwise, it’s entirely up to you which benefits you provide to part-time employees.
Paying attention to detail
Typically, part-timers are paid on an hourly basis. You could, if your state permits it, pay a salary to part-time employees if you choose. However, most companies will pay a certain amount for each hour worked. Again, one advantage to having a part-time employee is that overtime pay often is not an issue. But part-time employees in certain states (such as Alaska, California and Colorado) may be entitled to overtime pay if they work over so many hours in a single day—even if they work only one day in a week.
Obviously, with all these rules, excellent record keeping is a must. Maintain your documentation in a central location and, though it’s tedious, be sure you capture all the important data you need on all your employees—part time and full time. The Fair Labor Standards Act requires that you keep these records up to date; the U.S. Department of Labor oversees documentation compliance. (See sidebar on Page 28, which lists what records are stipulated by the Fair Labor Standards Act.)
The bottom line is that both part-time and full-time employees are integral to your business. They’re a vital human resource that can make or break your company. Though rules vary between these two types of employees, they’re still your employees and, regardless of their employment status, their contributions are important to the success of your business.
Useful terms
Exempt employee An associate who is exempt from overtime pay under the Fair Labor Standards Act; typically, a salaried employee
Full-time worker Generally, someone who consistently works 40 or more hours in a week
Nonexempt employee An associate who is subject to overtime pay under the Fair Labor Standards Act; typically, an hourly employee
Overtime Time worked beyond an employee’s usual work time; usually, time and a half for more than 40 hours in a workweek; some states have varying rules
Part-time worker Generally, someone who consistently works less than 30 or 35 hours in a week
Salary Fixed compensation usually paid weekly, biweekly or monthly
Straight-time earnings Compensation prior to overtime being paid
Wage Compensation paid on a per hour basis
Workweek Any time during a seven-day period when work is compensated
How to calculate a part-time salary
You have the option to pay your part-time employees a salary. The compensation is based on what part-timers would be paid if they were on a full-time salary. Realize, of course, that your state may have rules that affect the following calculations.
As an example, the following assumes that a part-time employee is paid $10 per hour, typically works 20 hours a week and that salaried employees are paid monthly.
Step 1 Determine what the annual full-time salary should be for this job title. Or, more simply, multiply the current hourly wage for your part-time person by 2,080 hours (40 hours in a workweek x 52 weeks in a year).
Step 2 Establish what a part-time workweek would be. In this example, the employee works 20 hours in a week.
Step 3 Multiply the established part-time workweek by 52 weeks (20 x 52 = 1,040).
Step 4 Multiply Step 3’s product by the hourly rate (1,040 x $10 = $10,400).
Step 5 Divide Step 4’s product by the number of pay periods in a year. In this example, the employee is paid once a month ($10,400 ÷ 12 = $866.67 per month).
You also could start with a typical annual salary (such as $30,000 a year) and determine what the hourly rate would be ($30,000 ÷ 2,080 hours = $14.42 per hour). Working through the steps above, with the same parameters, the monthly salary for a part-time employee working 20 hours per week would be $1,249.73.
Check your record keeping
You probably already maintain solid records, but it’s a good idea to verify them against the following checklist. These are required under the Fair Labor Standards Act, administered by the U.S. Department of Labor:
- Personal information, including employee’s name, home address, occupation, sex and birth date, if under 19 years of age
- Hour and day when workweek begins
- Total hours worked each workday and each workweek
- Total daily or weekly straight-time earnings
- Regular hourly pay rate for any week when overtime is worked
- Total overtime pay for the workweek
- Deductions from or additions to wages
- Total wages paid each pay period
- Date of payment and pay period covered
Note: This story is intended for informational purposes. Please consult with your accounting, legal or human resources advisers for specific instructions regarding your company and its policies.
