Full-Time Employees

Don't assume that an employee must work a 40-hour week to qualify as full-time. The definition of "full-time" varies, depending on which law you're looking at. However, in many cases a person who works at least 30 hours a week (1,500 hours a year) will be considered full-time. In some cases, a person who works at least 75 percent of the average number of hours that are customary for an employee in that particular position must be considered "full time."

ABC Corporation hires Joe Sloan. It is customary for bookkeepers who are employed by ABC to perform services 35 hours per week or 1820 hours per year. During the next consecutive 12-month period, Joe performs 1450 hours of services for ABC. Joe does not meet the first leg of the test for being employed on a substantial full-time basis because he did not perform 1500 hours of service. However, Joe does meet the second test for full-time service because he performed services for a number of hours equal to at least 75 percent of the number of hours that are customarily worked by an employee in that particular position (.75 x 1820 hours = 1365 hours customarily performed). Therefore, Joe is a full-time employee of ABC.

This situation becomes especially significant if you have other full-time employees who receive benefits. Because Joe now qualifies as a full-time employee, he may become entitled to benefits also.

Pros and cons of full-time employees. There are several advantages to hiring full-time staff. Because most people work only one full-time job, you are more likely to have control over the employee's time and to get increased employee loyalty from a full-time worker. You may have the peace of mind that there will be someone around to "mind the store" in your absence. You may also be looking ahead to the day when you want to sell your business, and full-time employees who already know the ropes make excellent buyers.

For some, however, the disadvantages far outweigh the advantages. Just look at the burden of computing payroll taxes and staying atop the federal, state, and local employment laws. Often, full-time employees receive benefits such as health insurance and paid vacation. Will you have to provide these types of benefits to be competitive? Who will do your employees' work while they're away?

If you're convinced that you need or want a full-time employee, your next step will be to formulate a clear picture of what you need done. If you're not sold on the idea of a full-time employee, check out other options such as part-time employees, temporary help, leased workers, or independent contractors.