The Fair Labor Standards Act (FLSA), the preeminent labor law in the country, does not define full or part-time employment. Full or part-time employment does not change the application of the FLSA; it’s protections apply to anyone who does work as an employee. Rather, the FLSA dictates when an employee must be paid overtime. Generally, overtime applies when an employee works over forty hours in one seven day period. * Both employers and employees can get into sticky situations believing that part-time employment means, specifically, less than thirty hours per week and that certain worker protections do not apply to part-time workers.
Many employers believe they do not have to provide benefits for employees who work less than thirty hours per week. This perception comes from the relatively recent mandates under the Affordable Care Act for employers to provide health insurance for full time employees, where a full-time employee is one who works an average of 30 hours per week for more than 120 days in a year. Employer mandated affordable health insurance applies to employers of fifty or more full-time employees. In the past few years, “thirty-hours” has become a short-hand definition for whether any benefits will be provided to part-time employees.
Employers are not prohibited from providing health or any other benefits to employees working less than thirty hours per week. Likewise, employees working less than thirty hours per week should inquire what benefits will be offered as part of their compensation. Neither employees nor employers should make assumptions about compensation–benefits and wages– purely based on the number of hours per week an employee will work.
Because the FLSA applies to all employees, part-time employees are protected by wage and hour laws. They must receive the minimum wage for their jurisdiction and overtime pay for work over forty hours in one seven day period. (Averaging over a two week pay period is not permitted under the FLSA.) Minimum wages vary from state to state, and in Maryland, county to county, so always check with the Department of Labor in your state for the most up to date information. The federal minimum wage is a stagnant $7.25 and is the minimum for any employer in the country when there is no superseding state or local law.
Employers whose employees earn over a threshold amount in one tax year must pay Federal Taxes for their employees (FICA: Social Security and Medicare, and Unemployment). States may have additional taxes for employers, such as state based unemployment insurance. For tax purposes, it is the wages paid in a certain tax year that trigger employer responsibilities, not the number of hours. So, having an employee work fewer than thirty hours per week may not exculpate an employer from tax responsibilities for their employees if their overall wages exceed the minimums on which employers must pay taxes. Similarly, it can be tempting to believe that employers can avoid tax burdens for part-time employees by classifying them as contractors and giving them 1099 tax forms. Whether a person who works for a company can be called a contractor or an employee is a nuanced topic, but in no instance is it determined solely by the number of hours a person works.
Part-time employees, whether they work over thirty hours per week or not, may also be protected by various family and sick leave policies. In Maryland, for example, businesses with 15 or more employees, including part-time, full-time, temporary, and seasonal workers, must provide their workforce with paid sick and safe leave. Employers with 14 or fewer employees are also required, at the minimum, to provide employees with unpaid sick and safe leave. Federal Family and Medical Leave may also apply to part-time employees, depending on the size of the employer and time the employee has worked for the company.
In all cases, part-time employment must be fair employment. All employers should make employment considerations based on their needs, but with a complete understanding of the various laws governing their responsibilities. Employees should be aware of their rights in the workplace, particularly where myth and misinformation abound. For more detailed information about your specific concerns for your business practices or your job, visit the Finkenstadt Law Contact page or call 301-887-8132 to schedule a consultation.
*Nothing in this post is intended to be legal advice nor does this post create an attorney client relationship.