Full-time and part-time benefits in the United States refer to the employee perks that are offered by employers to their workers, based on their employment status. These benefits can vary depending on how an employee is classified.
Because the US is considered an at-will country, employers are only required to give employees certain benefits if they’re full-time and all employees are always entitled to overtime pay. However, larger companies (50 employees or more) are required under the Family and Medical Leave Act to give full-time employees 12 weeks of unpaid time off per year. Employers in the US do give full-time employees extra fringe benefits to remain competitive and reward employees for their hard work.
Full-time employees typically work a standard number of hours per week and are entitled to a comprehensive package of benefits that may include health insurance, retirement plans, and paid time off (PTO). On the other hand, part-time employees work fewer hours and often receive a more limited or scaled-down version of benefits.
In this article, we’ll explore full-time vs. part-time employee benefits in the US and give a breakdown of typical benefits each classification of worker receives.
Understanding the differences between part-time and full-time employees and their corresponding benefits is vital. Both employers and workers should understand these benefits in the US to ensure a fair and balanced working environment.
Here are some of the key differences between the two:
Work Hours and Status:
Full-time employees typically work a standard 40 hours per week. However, salaried employees may be considered full-time but end up working more than 40 hours, as defined by the employer.
Part-time employees work fewer hours per week than full-time employees. The specific number of part-time hours will always be lower than full-time hours, but most companies have part-time employees working right around 30-35 hours per week.
Eligibility for Benefits:
Full-time employees are more likely to be eligible for a comprehensive package of benefits. These benefits may include health insurance, retirement plans, paid time off (vacation and sick days), and other perks, like tuition reimbursement and employee discounts.
Part-time employees may also be eligible for some benefits, but the amount of benefits offered to workers is up to the employers. Employers are usually exempt from legally providing part-time employee benefits.
Overtime pay is an additional compensation that employees receive for working more than the standard number of hours in one week
Here's a breakdown of how overtime pay splits between the two classifications in the US.
Full-time employees are typically eligible for overtime pay if they work more than the standard number of hours defined by labor laws or the employer's policies. For example, if the standard work week is 40 hours and an employee works 45 hours in a week, the additional 5 hours are considered overtime.
Full-time employees who work overtime have their wages calculated at a higher rate than their regular hourly pay. For both full-time and part-time employees, overtime pay is set 1.5 times the regular hourly rate for each hour worked beyond the standard week.
Part-time employees are eligible for overtime pay if they work more than the maximum number of hours defined by labor regulations for part-time employment.
It's important to note that not all part-time employees may work enough hours to qualify for overtime pay. Why? They might not reach the threshold of 40 hours per week that is considered full-time in the US.
Because the United States is considered at-will, employers are not required to provide their employees with any benefits at all. The only required benefits in the US by employers are social security, unemployment insurance, Medicare, and family and medical leave (if the employer has more than 50 employees).
Some states, including California and Hawaii, require additional employee benefits to be provided to full-time workers, while others, like Florida and North Carolina, require none.
However, many employers choose to give workers in the US additional employee benefits as an incentive for attracting top talent and boosting worker morale.
We’ll explore below some typical benefits that full-time employees receive vs. part-time employees below.
Full-time employees are more likely to receive health insurance coverage from their employer. The employer may cover a significant portion of the premium, and the coverage is often comprehensive.
Part-time employees may also be offered health insurance, but the employer's contribution may be lower, and the coverage may be less extensive.
Full-time employees often have access to retirement plans like a 401(k) or pension plan with employer contributions, which can help them save for retirement.
On the other hand, part-time employees usually aren’t offered these perks.
Full-time employees receive some form of paid time off, which may include vacation days, sick leave, maternity and parental leave, as well as paid holidays off.
While part-time employees may also receive some paid time off, it is typically prorated based on the number of hours they work. In the US, it’s up to the business owner’s discretion whether they want to pay their part-time employees for bank holidays off.
One of the best parts about being a full-time employee is job stability. Full-time employees will usually sign an employment contract in the US that states exactly what job protections they’re entitled to, such as notice periods before termination and eligibility for a severance package and unemployment benefits
However, part-time employees may have more flexibility in their work schedule but usually don’t have as many protections in their jobs. Part-time employees don’t often receive any severance benefits and may not even receive notice upon termination.
Another advantage of being a full-time employee is receiving a fixed monthly salary or an annual wage, depending on the employer's pay practices. This gives employees the opportunity to plan out their finances each month.
Part-time employees are often paid on an hourly basis or receive a pro-rata portion of a full-time salary, reflecting the number of hours they work.
One of the best parts about being a full-time employee is having access to more opportunities for career growth and advancement within the company. Full-time employees are likely to have a more significant presence in the organization. This means they can take on more responsibility and have their achievements recognized more quickly.
On the other hand, part-time employees may have fewer advancement opportunities within the same company due to their reduced work hours and temporary nature of their roles.
Although the United States does encourage employers to provide their workers with benefits, in most cases these benefits are not mandated on a federal basis.
Let’s explore below how the US measures up for benefits compared to Latin America, Europe, and Asia.
Employee benefits in the US and Latin America can differ significantly due to variations in labor laws, cultural norms, and economic factors.
In the US, employee benefits often revolve around a strong emphasis on individualism, with employers offering benefit packages tailored towards each individual employee and their standing within the company. The US places a considerable responsibility on employees to manage their benefits and healthcare options actively.
In contrast, in Latin America, there is generally a greater focus on collective welfare, and government-mandated benefits play a more prominent role.
Benefit packages may differ between countries in Latin America but often encompass:
Maternity and paternity leave
Robust social security programs
While both regions prioritize employee well-being, the approach to employee benefits in the US and Latin America highlights distinct cultural and regulatory influences.
Benefits in the US and Europe showcase distinct approaches to employee welfare, reflecting differences in social systems and labor practices.
In the US, benefits often emphasize flexibility and individual responsibility. Employees typically have the opportunity to select benefit plans that suit their needs, with employers contributing to health insurance and retirement plans–but not being required to cover the entire cost.
In contrast, Europe generally follows a more comprehensive social welfare model, where governments play a significant role in providing extensive benefits to citizens. In many European countries, employees enjoy universal healthcare, generous paid vacation days, parental leave, robust social security, and more protections from termination as well as better severance packages. and robust social security safety nets.
While the US prioritizes personal choice and employer-sponsored benefits, Europe's approach ensures a broader safety net and standardized provisions to protect workers' well-being.
Employee benefits in the US and Asia display notable distinctions, shaped by cultural norms, governmental policies, and labor practices.
In the US, employee benefits often revolve around employer-sponsored programs that emphasize individual choice. Common benefits include health insurance, retirement plans, and paid time off, with employees having the flexibility to tailor their packages.
In contrast, Asia's approach places a greater emphasis on collective welfare and government involvement. Many Asian countries offer universal healthcare, extensive social security programs, and generous paid leave, prioritizing the well-being of employees and their families.
Asian culture differs greatly from the United States in terms of access to remote work. While remote work in the US is becoming a staple part of workforce culture, surveys throughout most Asian countries state that they prefer to work in-office.
Both regions prioritize employee welfare, but the US emphasizes personalized options, while Asia leans towards comprehensive and standardized benefits.
An employer-of-record (EOR) handles various human resources tasks and assists with global hiring, including payroll, taxes, compliance, and employee benefit management.
Benefit tasks that an EOR takes care of include:
Benefit plan selection and customization
On-the-ground support and help with compliance
Communication and employee support
Cost management and reporting
By outsourcing employee benefit management to an employer-of-record, companies can streamline their HR processes, reduce administrative burdens, ensure compliance, and provide their employees with a more efficient and effective benefits experience.
In doing so, companies can focus on their core business while leaving the complexities of HR management to the EOR.
Via makes hiring talent around the world and building your global team seamless by helping you onboard workers in as little as 2-3 business days. With our easy-to-use platform, Via helps you manage local HR processes for direct employment such as work visas & permits, employee data privacy compliance, benefits, global payroll, background checks, and more. Our team of local labor lawyers and on-the-ground experts provide 24-hour local support and ensure that your company remains compliant while expanding abroad. As your employer-of-record/entity abroad, Via assumes responsibility for employment liability, so that you can focus on what matters: recruiting and managing your team.