More than just hours. What U.S. employers need to know about worker classification.
Hiring in the U.S.? Whether you're scaling a startup or expanding
a global team, one of the first questions you'll face is:
Should this role be part-time or full-time?
It’s not just a scheduling decision. In the U.S., part-time vs. full-time status has legal, financial, and cultural implications that can affect everything from benefits eligibility to tax compliance.
Here’s what you need to know...
Defining Part-time vs. Full-Time in the U.S.
There’s no universal legal definition of “full-time” under federal law. But generally:
- Full-Time typically means 30 to 40 hours per week
- Part-Time is less than 30 hours per week
Employers often define these terms in company handbooks or job descriptions, but thresholds can matter for benefit plans, tax rules, and labor law compliance.
Key Differences That Matter for Employers
1. Benefits Eligibility
Under the Affordable Care Act (ACA), companies with 50+ full-time equivalent employees must offer health insurance to full-time staff (30+ hours/week). This is not required for part-time employees under federal law, although certain local laws still require benefits or health spending for part-time staff. Always familiarize yourself with any applicable state and local laws before hiring.
2. Payroll & Tax Withholding
Both full-time and part-time employees are subject to federal and state income tax withholding, Social Security, and Medicare. But part-time roles may involve less administrative overhead in terms of benefits, paid time off, or overtime tracking.
3. Cost & Flexibility
- Part-time roles can reduce labor costs and offer flexibility for seasonal, project-based, or transitional needs.
- Full-time hires often bring greater continuity, retention, and availability but with higher total compensation expectations.
4. Employees vs. Contractors
Both full-time and part-time workers are employees - on your payroll, with taxes withheld, and covered by labor laws. Independent contractors are different: they’re self-employed, send invoices, pay their own taxes, and don’t get company benefits.
Mixing them up can be costly. If a contractor is treated like an employee, the IRS or Department of Labor may see it as misclassification, leading to back taxes, penalties, and legal issues.
What’s Right for Your Business?
Ask yourself:
- Does this role require consistent coverage and full availability?
- Is this a core or supporting function?
- Are we prepared to offer benefits and longer-term commitments?
- How will the classification affect our ACA or FLSA obligations?
If you're an international company hiring U.S. talent for the first time, be aware: cultural expectations around benefits and hours differ from country to country. U.S. employees often see full-time work as tied to benefits, stability, and long-term career aspirations.
Best Practices for Employers
- Document your definitions (e.g., what qualifies as full-time) in employee handbooks or offer letters.
- Be consistent in how you apply benefit eligibility and classification.
- Stay compliant with state-specific laws - some states have unique rules around breaks, paid leave, and overtime.
- Consider hybrid roles or phased approaches (e.g., start part-time, transition to full-time) when scaling.
There’s no one-size-fits-all approach. The choice between part-time and full-time depends on your team structure, budget, legal obligations, and long-term hiring goals.
But getting it wrong - especially in the U.S. - can be costly. That’s why at Orbiss, we help companies navigate these decisions with clarity and compliance in mind. Reach out to learn more!
