Key Differences You Should Know – Forbes Advisor


A few federal laws govern your responsibility as an employer to your employees based on the hours they work.

ACA

Under the ACA, so-called applicable large employers (ALEs) are required to offer minimum health insurance coverage to full-time employees, as the IRS explains.

ALEs are any employers that have an average of 50 or more full-time employees in a year. This includes “full-time equivalent” employees, which is a group of employees whose hours add up to those of a full-time employee. In other words, large businesses can’t completely avoid the responsibility of providing health insurance by employing a bunch of part-timers—though they still aren’t responsible for providing health insurance to those part-time employees.

Under the ACA, the IRS explains, an employee is considered full-time if they work an average of at least 30 hours per week or 130 hours per month.

The ACA is the only federal law that explicitly defines a full-time employee. That 30-hour-a-week definition only applies to an employer’s health insurance responsibility and doesn’t govern how you classify employees for eligibility for other benefits. However, because of this requirement, it might be easier on your record keeping to set your full-time cut-off at 30 hours across the board.

Overtime Pay

The FLSA applies to all nonexempt employees, regardless of full-time versus part-time status. It entitles non-exempt employees to the federal minimum wage — $7.25 per hour as of this writing — and to time-and-a-half overtime pay for hours worked over 40 hours in a work week.

Any part-time or full-time employee would be entitled to overtime pay when they work more than 40 hours in a given week unless they’re classified as exempt per the FLSA.

The FLSA defines exempt as executive, administrative, professional and outside sales employees and “certain computer employees,” who are paid a salary of at least $684 per week. The FLSA defines the job duties that constitute exempt positions. Defining an employee as full time or giving them a related job title isn’t enough.

Family and Medical Leave

The Family and Medical Leave Act of 1993 (FMLA) entitles employees to unpaid, job-protected leave for circumstances including the birth or placement of a child, long-term illness or care for a family member.

FMLA leave applies to all employees regardless of full-time or part-time status, but it does come with some work hour requirements.

To be eligible for job-protected leave under FMLA, an employee must have worked for your business for at least 12 months and worked at least 1,250 hours for your business in the previous 12 months. That works out to around 26 hours per week minimum, which means many part-time employees might not be eligible.

Like the ACA, FMLA only applies to businesses with at least 50 employees.



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