Differences Between Part-Time and Full-Time Retail Employees
According to the Bureau of Labor Statistics, there were nearly 5 million retail jobs in the U.S in 2016. Out of this figure, nearly one in three retail salespeople were classified as part-time employees. Both full-time and part-time retail employees are valuable aspects of a thriving retail business. However, there are differences in relation to the entitlement and management of full-time and part-time retail employees.
You, as a retailer need to decide whether to hire full-time employees, part-time employees or a mixture of both. There are benefits and disadvantages to each type of employee. For example, commitment levels and costs will be different for part-time and full-time employees.
Definition of a full-time and part-time employee
In general, you are responsible for defining what constitutes a full-time and part-time employee for your retail business. However, you will be unable to completely make up your own classification of full-time and part-time retail employees if you provide health insurance to full-time employees. In this case, you need to apply the definition stated by the Affordable Care Act of full-time and part-time employees.
According to the Affordable Care Act:
- A full-time employee works an average of at least 30 hours a week, or 130 hours each month for more than 120 consecutive days.
- A part-time employee works an average of less than 30 hours a week, or less than 130 hours each month for more than 120 consecutive days.
You are required by the Affordable Care Act to calculate full-time equivalents in your retail business. This calculation involves determining the percentage that each part-time employee works in comparison to a full-time employee. Full-time equivalent calculations are only for your retail business purposes and do not affect your employees. If your retail business has 50 or more full-time employees, you are liable to pay a penalty if your employees are not offered a health plan. Where your retail business has less than 50 full-time employees, you may be entitled to get tax credits if you offer your employees a health plan.
The Bureau of State Labor Statistics also offers a definition of full-time and part-time employees, as follows:
- A full-time employee is someone who works 35 hours or more each week.
- A part-time employee works between 1 – 34 hours each week.
Before you specify the number of hours that will amount to full-time and part-time work, you need to be aware of the different laws that regulate various aspects of employment. You should consider seeking advice from a labor lawyer to determine how different types of employees will be affected in relation to pay, benefits and your retail business in general.
There are some standard provisions in terms of full-time and part-time retail employees. The Fair Labor Standards Act (FLSA) is the main legislation that deals with employment in the U.S. The FLSA states that irrespective of whether an employee is considered to be full-time or part-time, you must comply with certain requirements. For example, pay minimum wage and adhere to restrictions relating to child labor.
It is within your rights to determine what constitutes full-time and part-time retail employees. However, you must be consistent when applying conditions to all of your employees.
Types of full-time and part-time employees
People who work full-time and part-time are normally motivated by different things. Full-time employees generally want to pursue a career in their field of work. Where a full-time employee does not want a retail career, they may choose to work full-time because they need the stability, income and benefits to support their family.
Part-time employees are usually only looking for ways to boost their income. Part-time employees can be students, retirees or parents with children of school age. There are some instances where part-time employees could be interested in pursuing a career in retail. In these cases, employees will accept a part-time job with the intention of gaining experience and progressing to a full-time position.
Differences between full-time and part-time employees
Here are some differences between full-time and part-time employees in relation to various aspects of your retail business:
- Employee benefits
Providing employee benefits helps you to hire more qualified and experienced employees for your retail business. However, the more benefits you offer, the more expensive it will be for your retail business. Full-time employees are entitled to all the benefits that you offer. Part-time employees may be entitled to none, some, or all the benefits you provide. You need to check your state’s laws for specific provisions relating to part-time employees and benefits.
- Paying taxes
You are responsible for paying income and The Federal Insurance Contributions Act (FICA) taxes for both your full-time and part-time retail employees. If you have employed statutory employees, you should seek the advice of an accounting professional to determine the type of tax you should withhold.
Another difference between full-time and part-time retail employees is how they get paid for the work they do. Part-time employees get paid based on the number of hours they work. You usually need to pay your part-time employees overtime pay if they work more than 40 hours per week.
On the other hand, full-time employees receive a set salary, which is calculated per annum. This yearly wage is then paid to the full-time employee in weekly or bi-weekly increments. Full-time employees are generally not entitled to overtime pay.
Effective scheduling is a key aspect of any retail business. Full-time employees generally have a set time when they start and end work. Therefore, scheduling tools are not required to regulate their working hours.
You need to provide your part-time retail employees with work schedules in order to make them aware of when they are expected to work. Part-time employee schedules can change depending on the needs of your business. Scheduling your part-time employees can get complicated, especially when they request time-off or they call in sick.
In order to get the best out of scheduling your part-time employees, you should provide them with information about how they should request time off, call in sick or change their schedule.
The tool you use to schedule your part-time employees’ shifts will make a big difference to the efficient management of your retail business. Deputy works with over 70,000 businesses, including retailers, to provide easy-to-use scheduling software for hourly employees. To enable you to effortlessly schedule your part-time workers, Deputy includes features such as:
A growing trend in relation to scheduling your part-time retail employees is predictive scheduling legislation. The main provision of these laws is that you must give your part-time employees sufficient notice of shifts or pay a penalty. If you operate in a state with predictive scheduling, you must ensure that you are compliant with these regulations or your business could suffer significant financial damage. Deputy helps you to remain compliant with predictive scheduling legislation while streamlining your scheduling process.
Sign up for a free trial of Deputy today to find out how we can help you to manage your part-time retail employees’ shifts with ease.
- Paid time off
There is no provision in Federal law for you to provide your employees with vacation pay. The FLSA does not require you to pay employees for time that they have not worked, for instance holidays and vacations. You must decide how many days vacation your employees will receive. This decision must then be communicated to your employees via your company policy or through a collective bargaining agreement. However, it is not unusual for smaller retailers to enter into an informal agreement with their employees in relation to vacation pay.
One of the requirements of offering paid time off to your full-time or part-time employees is that you must make your policy fair. You are not permitted to discriminate based on race, religion, gender or other protected attributes when providing time off to your employees.
- Commitment levels
You need both your part-time and full-time employees to be committed to your retail business, so that, they can provide the highest level of customer service.
Full-time employees are generally more committed to your business because the job is probably the only way they make their living and how they receive benefits. Therefore, they will take their job more seriously and feel more attached to your business.
Part-time employees may be less committed because they might be trying to cope with different issues outside of work, for example, school or another part-time job. Additionally, part-time employees may be more detached from work because they spend less time interacting with your retail business and therefore, would find it easier to abandon the job. Absenteeism may also be an issue when dealing with part-time employees. This is another reason that reliable scheduling software is necessary when dealing with part-time retail employees. For instance, Deputy enables you to replace and change shifts easily in the event of no-shows.
You should make every attempt to decrease costs in your retail business in order to increase your profits. Given that labor costs are one of the biggest business expenses, it is vital to weigh-up the costs in relation to hiring part-time and full-time employees. When calculating the costs of your employees, you should include their gross pay, taxes, social security and other benefits. Full-time employees have higher labor costs than part-time employees. This is due to the fact that full-time employees are normally entitled to benefits, like health insurance and retirement benefits.
Lower labor costs for part-time employees are an advantage of using hourly workers. Costs are kept low because retailers pay part-time employees for only the hours worked. Part-time employees generally are not entitled to the benefits that full-time employees receive. This results in significant savings for your retail business.
The seasonal nature of the retail industry requires a flexible workforce. Employing both full-time and part-time employees will enable you to react to the changing demands of peak and off-peak times
Full-time employees are contracted to work whether your retail business is experiencing a slow period or not. You are obligated to pay your full-time retail employees, irrespective of whether there is enough work to do during their contracted hours.
Part-time employees can be scheduled only when they are required. Predicting the patterns in your retail business makes it easier to schedule the right number of part-time employees. Deputy’s auto-scheduling feature helps you to accurately forecast how many people are required for different shifts, with just one click.
Treatment of part-time and full-time employees
It is a legal requirement to treat all employees fairly, whether they work for you on a part-time or full-time basis. In addition to legal requirements, providing the following to all your employees will encourage them to give their best to your retail business:
Communication – Effective communication with all of your employees helps them to feel valued and therefore, they are more likely to engage. Keeping your employees updated should be simple and using a tool like Deputy gives you the options to send messages to one or all of your employees through one portal.
Appreciation – All of your employees deserve to be recognized for their hard work. Demonstrate that you appreciate your employees by openly praising their good work and providing incentives for others to follow the positive example.
There are plenty differences between your part-time and full-time retail employees. However, the one thing that is consistent for both groups is that they are entitled to be paid accurately. Take the guesswork and frustration out of calculating your hourly employees’ pay by contacting Deputy for a free trial by clicking on the button below!