Glossary of Human Resources Management and Employee Benefit Terms
The definition of part-time hours is an employer-determined standard for employees working less than the full-time standard set out in labor laws. Part-time employees work shorter shifts or fewer days, and employers generally provide different benefits access for part-time employees.
According to the Fair Labor Standards Act (FLSA), hourly employees can work up to 40 hours each week before receiving overtime pay. While the FLSA places limits on working hours, it doesn’t specify minimum limits. Employers make the decision to hire part-time employees as part of their workforce and set the standards. The calculation for full-time hours is derived from the common practice of working eight hours each day for five working days each week; one common practice for part-time employees is to reduce the workweek to four eight-hour days, for a total of 32 hours.
Retail, production, and other shift-based employers may also bring on part-time employees to cover weekly fluctuations in their needs, such as timing their shifts to cover higher traffic on weekends.
For the majority of employer-offered benefits, the decision to make part-time employees eligible is entirely up to the employer. However, the number of part-time employees and the hours they work has an effect on an organization’s compliance with the Affordable Care Act (ACA).
The ACA considers any employee working more than 30 hours per week as a full-time employee. In addition, the law adds all the hours worked by part-time employees with less than 30 hours each week to their measure of Full-Time Equivalent Employees (FTEs). Employers who employ more than 50 FTEs must follow specific requirements set out in the ACA.
The formula for calculating FTEs is as follows:
Full Time Employee Count + (Total Part Time Hours/30) = FTE Total
Here’s how the equation looks in an example where 20 employees work 32 hours per week and 10 others work 20 hours per week:
20 FTEs + (200/30) = 26.66 FTEs
If an organization reaches the 50 FTE threshold, the ACA requires it to offer qualified health insurance to 95 percent of its full-time employees or face fines. There are no requirements for offering health insurance to part-time employees.