Your company started with a great idea and is growing to employ some of the best talent in your industry. As your organization expands and flourishes, it’s important to understand the benefits and drawbacks of all kinds of hiring decisions – including the choice you have between hiring full or part-time employees. Benely is here to help! Read on to learn what the Employee Benefits and Compliance Experts at Benely have to say about the pros, cons, and nuances of hiring full-time versus part-time staff.
What Makes an Employee Full-Time?
The Affordable Care Act defines a full-time employee as an employee who is working for the company for a minimum of 30 hours per week, or 130 hours per month for more than 120 days in a row. This is the same standard separating part-time from full-time employees that the IRS provides.
According to the IRS, there are two ways to determine whether a given employee is full-time. These are: (1) the monthly measurement method and (2) the look-back measurement method.
To calculate full-time versus part-time status using the monthly measurement method, the determination is made on a month-by-month basis by looking at whether the employee has at least 130 hours of service for each month.
To calculate status using the look-back measurement method, a determination is made during the “stability period,” based upon the employee’s hours of service in the preceding period, referred to as the measurement period. The IRS cautions that employers cannot use the look-back measurement method to determine full-time employee status for purposes of ALE (Applicable Large Employer) status determination.
What Makes an Employee Part-Time?
Conversely, if an employer has a group of employees who are not averaging 30 hours per week, or 130 hours per month for more than 120 in a row, these individuals are considered part-time employees.
Weighing the Pros and Cons:
1. Provision of Health Benefits
The Affordable Care Act (ACA) mandates that employers with fifty or more full-time employees must offer health insurance to their full-time employees. If you have fifty or more full-time employees, your company is considered an Applicable Large Employer, or ALE, under the ACA. In other words, if your small business has grown to fifty or more full-time employees, the Affordable Care Act applies to you. If you don’t have fifty or more full-time employees (or part-time workers whose hours add up to the same amount), it does not.
Under the Affordable Care Act, employees with fifty or more employees must either offer health care coverage to all full-time employees, or they must pay a fee. This can be seen as a “downside” to hiring full-time employees, as no employer is federally required to offer health care coverage to their part-time employees, whether they are an ALE or not.
Recruitment strategy is a key item to consider when deciding whether to offer a position as full or part-time. Often, the decision will turn on the expectations involved in the role. Is this the kind of position where a candidate needs specific or advanced education to succeed? If so, the role may be best positioned as full-time, accompanied by a full-time salary and benefits, to make it attractive to qualified candidates.
3. Flexibility versus Dependability
A big “pro” of part-time staff is the flexibility that comes along with them. They can easily move in and out of different roles within the company, and they’re easily replaced when they move on. But consider the “con,” here as well: part-time employees may feel less invested in their relationship to your organization and less like an integral part of the overall company culture. This could make them less dependable as employees.
When weighing the factors of flexibility and dependability, think hard about what your company needs more of at this time. And as with all other factors, this will also be heavily role-specific. Ask yourself whether the role be completed adequately in the evenings or on weekends, in an ad-hoc structure. If so, perhaps the role is best as one that’s part-time. Or, would the role likely require in-office collaboration and frequent face-time with other team members at a moment’s notice? If so, perhaps full-time is best.
4. Work-Life Balance and Burnout
One of the most common complaints lodged by full-time workers is burnout. But according to a recent Gallup poll, the idea that reducing hours will solve employee burnout is one of the most common burnout myths. Gallup reported that their statistics showed the number of hours people do matter; however, burnout risk did not increase significantly until employees worked over 50 hours (it rose even higher after 60 hours.) It turns out, burnout has much more to do with how employees are managed and supported during those hours.
That said, if your part-time employees are being stretched thin, it’s probably time to consider offering to change their position to full-time. Doing so can relieve the time-crunch and stress associated with completing their assigned tasks: two major factors contributing to burnout. On the other hand, full-time employees with increasingly demanding personal lives, such as those involved in caregiving duties, may require the work-life balance that a part-time position could provide – at least temporarily.
Simply put, part-time positions don’t necessarily equal lesser burnout, and full-time positions don’t always amount to little work-life balance. The distinction between full-time and part-time can be fluid over time and based on current employees’ needs.
Making the Right Choice for Your Business:
Building a company from the ground up is difficult enough. Handling employee benefits, hiring processes, and other human resources functions should be simple. With the experts at Benely, it can be. Benely has over a decade of experience simplifying HR processes for companies from New York to California. Your company cares about doing the right thing by its employees, and so does Benely. Contact Benely for a free demo today.