Part-Time vs. Full-Time Employee: The Pros and Cons

When hiring, one of the first questions you may ask yourself is what is the scope of work and how many hours will it take to meet the team’s goals. Your answer to this question will impact whether your new hire will become a full or part-time employee.

As both types of workers come with their benefits and drawbacks, it’s important to understand the difference between the two, especially as they may have different financial and logistical outcomes.

Check out our guide to learn more about part-time vs full-time employment and how each will effect your payroll, business classifications, and daily operations. First though, let’s clarify what each label means.

The differences between part-time and full-time employees

From schedules, payments, and benefits, here’s a breakdown of each employee.

The above chart is a broader look into the differences between full and part-time employees. Let’s take a closer look into part-time workers and what they’ll mean for your company.

Part-time employees are workers who work fewer hours than full-time employees. Some employers schedule part-time employers for no more than 30 hours per week.

Part-time employees defined

In the US, there is no federal law defining full-time or part-time employment. For instance, the Fair Labor Standards Act (FLSA) doesn’t specify a set number of hours for these classifications, instead leaving it to employers to define them in their company policies.

Organizations like the Bureau of Labor Statistics and the Internal Revenue Service (IRS) often consider full-time employment as working between 30-40 hours per week, while part-time is typically fewer than 30-40 hours.

For global businesses, definitions and regulations of full-time and part-time employment vary across different countries, affecting benefits, working hours, and employee rights.
Employers hiring a part-time worker can work with a more flexible schedule and always cover your business’s needs. You can also decide which benefits you’ll grant part-time employees. Lastly, it’s important to consider how hiring part-time employees will affect your payroll and overtime payments. Let’s go into each one a bit more in depth.

What are the work schedules

Your schedule for part-time workers will be flexible. They may work Monday through Wednesday from 8:00 AM to 12:00 AM and Saturday and Sunday from 9:00 AM to 4:00 PM. One week, you may schedule an employee to work five six-hour days and the next week, three eight-hour days.
You can even rotate employees to cover late-night and weekend shifts, schedule them as needed during busier times of the year (such as the holiday season), or cover for agents out sick or OOO.

What is a typical schedule for part-time vs. full-time employees?

Part-time employees have adaptable schedules. They can work one week Monday through Wednesday from 8:00 AM to 12:00 PM and Saturday and Sunday from 9:00 AM to 4:00 PM the next. You may need to schedule an employee for five six-hour days one week and three eight-hour days the following week.

They can work during the weekdays, on weekends, or cover night shifts. Part-time jobs can also work seasonally, especially during busy periods such as the holidays or the summer months.
Full-time employees typically work 9:00 am to 5:00 pm (or 9:00 am to 6:00 pm) in some countries Monday-Friday. Full-time positions are year-round, instead of seasonal.

What benefits do full-time and part-time workers receive?

In the U.S., all part-time and full-time employees must receive the following benefits:

• Health insurance
• Worker’s compensation
• Overtime pay
• Family and medical leave
• Retirement savings plans (The SECURE Act and SECURE 2.0 Act mandate that long-term, part-time employees who work 500 or more hours for two consecutive years be allowed to participate in 401(k) plans).

Employers can however, decide whether or not to give part-time employees nonmandatory benefits, such as tuition reimbursement, gym memberships, subsidized meals, and so on. While these benefits aren’t mandatory, competitive companies often provide extended health insurance, paid time off, and retirement plans to attract and retain talent.

Employers outside of the U.S. have different policies when it comes to benefits for those working fewer hours. Let’s take a look at a few countries to see how part-time employment benefits stack up:

• Australia – Part-time employees get the same minimum entitlements as full-time employees (paid leave, annual leave, sick/carer’s leave, family and domestic violence leave. etc) on a proportional basis.
• Canada – Workers working fewer than a third of the normal full-time workweek may affect eligibility for disability insurance, Public Service Dental Care Plan and Public Service Superannuation Plan.
• European Union – Businesses must offer part‑time staff the same employment conditions as full-time workers, including pay, leave, notice periods, and other rights and benefits.
• United Kingdom – Part-time workers get the same benefits as full-time employees, including: sick pay, maternity, paternity and adoption leave and pay, pension opportunities and benefits, holidays, etc.
• United States – Some benefits may depend on individual state laws, but on a federal level (depending on how many hours the employee has worked for the company), part-time workers may be legally entitled to: workers’ compensation, retirement savings plans, overtime pay, health insurance, and family and medical leave.

How do part-time employees and full-time employees get paid?

Part-time employees are always paid by the hour. They usually need to “clock in” and “clock out” at the beginning and end of each shift. Employers may also ask them to submit a timesheet at the end of every week to ensure they get paid for all of the hours they work.
Full-time employees usually receive a fixed salary each month and often earn more than part-time workers. Full-time workers often earn higher salaries if they have specialized skills.

Payroll payments

Calculating payroll payments will depend on your business and your local laws, but here are some general steps for part-time employees:

1. Determine the employee’s gross pay – the pay they receive without taxes and benefits
2. Calculate deductions – add up any taxes and benefits
3. Subtract deductions from gross pay – get their net wages by subtracting deductions from their gross pay
4. Calculate the payroll tax liabilities – factor this in to your payroll entry
5. Calculate the total payroll cost – These are all the costs an employer has accumulated to compensate its employees, such as employee compensation and the employer-paid portion of payroll taxes.

Overtime exemption

The Fair Labor Standards Act (FLSA) doesn’t define full-time employment or part-time employment, instead, leaving the matter up to the employer. This makes it harder to determine who is exempt or non exempt from receiving overtime.

According to FLSA, non-exempt employees are entitled to overtime pay, while exempt employees are not.
That means as an employer, you would need to pay non-exempt employees overtime for additional hours worked.

Exempt workers do not typically qualify for overtime.

Employing part-time employees means you may not need to cover additional benefits (those not required by law), can get creative with scheduling to fit your business, and have less money come out of your business’s pocket.

Pros aside, there’s also a cost to employing part-time workers, just as there is hiring full-time employees.

What are exempt and non-exempt employees and why does it matter?

Exempt employees are typically administrators, professionals, or executives. They are “exempt” from the Fair Labor Standards Act’s (FLSA) overtime regulations and are not entitled to overtime pay. Non-exempt employees receive hourly wages hourly take on more manual or technical roles. They are “not exempt” from FLSA overtime regulations and can receive overtime pay for all hours worked beyond a 40-hour work week.
Aside from financial differences, exemption status also affects a business’s compliance and payroll operations.

Payroll
HR and finance teams can follow a regular payroll schedule with exempt workers. Each month, their salaries are the same, no matter how many hours they work.
Non-exempt workers have unpredictable hours, requiring payroll teams to carefully manage and follow overtime regulations, such as tracking their hours to prevent expensive overtime costs.

Compliance
Not abiding by FLSA regulations can expose businesses to financial penalties. The Department of Labor (DoL) can fine any employer that violates FLSA. Companies will need to pay accrued court fees as well.
Disregarding FLSA obligations can also lead to lawsuits from employees entitled to back pay.
The bottom line: there’s a cost to employing part-time and full-time employees.

Challenges of employing part-time and full-time employees

Just as we mentioned above, each type of employee comes with their own challenges. Knowing what may lie ahead—from scheduling difficulties to paying more out of pocket—can help you make the right decision for your business. Let’s explore three of the most common roadblocks for part-time and full-time employees.

1. Difficulty in scheduling – When every part-time employee has their own schedule away from the office, it can be tricky combining everyone’s availability into one organized schedule. Some employees may only be available Monday-Wednesdays, while others can only work Tuesdays and Saturdays.
2. Higher turnover rate for part-time employees – Part-time employees may feel less loyal towards your company and may leave after the summer or when they graduate college. Higher turnover rates may make your company operations less stable because you’ll need to constantly find the resources to fill any gaps.
3. Higher cost for benefits for full-time employees – Hiring full-time employees not only means covering the basic mandatory benefits such as Medicare and Social Security, but additional benefits to retain employees as well, such as gym memberships or stipends, dental care, or mental health support.

Of course the above are just a few considerations when making hiring decisions. Before you hire, you’ll also need to have a good grasp on your business category.

Differences in business classifications (SE vs ALEs)

Understanding the various employment classifications is important as it impacts your company’s benefits, responsibilities, and compliance.

The full-time or part-time status of the workforce can determine a company’s categorization. In the U.S., businesses fall into either Small Employer (SE) or Applicable Large Employer (ALE) categories.

ALEs are required to offer minimum essential coverage health insurance to their full-time employees under the Under the Affordable Care Act’s employer-shared responsibility provisions, also known as the “employer mandate.”

ALEs that don’t offer insurance must make employee shared responsibility payments (a kind of tax penalty) to the IRS. ALEs also have reporting responsibilities regarding health insurance coverage offered to employees. These responsibilities require employers to report information about the type and period of coverage to the IRS and receiving employees.

SEs that provide minimum essential coverage must also report coverage information to the IRS and employees. Though, it’s important to note that SEs can choose not to provide coverage altogether.
Misclassifying employees can lead to non-compliance and potential penalties. Employers that correctly classify workers can ensure they’re following labor laws and regulations.

How to choose a full-time vs a part-time employee

When factoring in employment classifications, benefits, FLSA regulations, and other considerations, deciding between a full-time and part-time employee can feel daunting. Here’s a checklist for common scenarios to help you make the right choice for your business.

Part-time

• I do not need this person to work more than 30 hours per week
• I need someone who can work flexible hours
• The business can afford to pay for overtime
• The business is growing and not ready for a full-time worker yet
• The business won’t suffer if the employee splits their time between my business and another

Full-time

• I need someone to work more than 30 hours per week
• The business needs to prioritize reliability over flexibility
• The business has a strict budget and less room for unforeseen costs each month
• I know exactly which positions to fill to fit the business’s needs
• I want employees to be loyal to my company

Businesses might also benefit from hiring freelancers, gig workers, and contract workers who specialize in certain fields. These workers aren’t employees. They provide their own materials, set their working hours, fees, and choose how they work (e.g. where and how). They are not entitled to employee legislation such as benefits or Social Security contributions.
If your company hires an IT freelancer for example, you can’t require them to work from your office or decide how they’ll approach tasks, but you can determine the project scope and agree to deadlines. On the payroll side, you’ll save money from not paying benefits (e.g. PTO, sick leave, etc) and you don’t need to withhold taxes because they’re obligated to handle their own taxes.

Stay compliant no matter your employees’ statuses

When considering full-time or part-time hires, you may want to factor in not only your budget, but any potential scheduling conflicts, turnover rates, and classifications that help you remain compliance.

No matter which option you choose or if you opt for a combination of the two, there’s a lot to familiarize yourself with when it comes to compliancy.

A workforce management solution can help you run payroll for all employees, ensure compliance by adhering to the relevant country’s laws, and give you one organized global payroll payments to manage payroll, payments, compliance, and HR activities.

Find out how you can easily hire and manage your team with our global payroll payments. Schedule a demo.