What do ‘FT’ and ‘PT’ Mean?
The abbreviations ‘FT’ and ‘PT’ stand for “full-time” and “part-time,” respectively. They refer to the status of an employee’s position at a business, specifically whether or not they work enough hours weekly to qualify as “full-time” employees.
Employers often offer certain work-related benefits, such as access to an employer-sponsored healthcare plan or paid vacation time, only to employees who regularly work enough hours to be considered “full-time,” or ‘FT,’ employees.
How Many Hours Qualifies an Employee as ‘Full-Time’ (FT)?
Almost all employers use both full-time (FT) and part-time (PT) employees at various points. But how a small employer defines FT employment – whether that means working 35 hours, 32 hours, or some other number of hours worked per week – is generally left up to the employer’s discretion.
There are some exceptions to this rule of thumb, however:
- If your business offers company pension or profit sharing plans, those benefits fall under the “1000 hour rule” of the Employee Retirement Income Security Act (ERISA). Employees who have completed 1,000 hours of service over 12 consecutive months are eligible to participate in any company pension or profit-sharing plan that is offered to other employees under that law.
- The Affordable Care Act (ACA) uses 30 hours as its FT standard, so employers with 50 or more employees need to consider this when determining health insurance eligibility.
If your business is not subject to the terms set by the ERISA or ACA, you are generally able to set FT status at whatever number of weekly hours that you like. However, it is wise to choose a few hours under 40 per week.
This makes it easier for FT employees to avoid overtime. It also gives you some leeway to adjust employee hours to suit business needs without necessarily prompting reclassification.
Otherwise, in some states, a FT employee who is consistently not getting the chance to work their FT hours (as designated by your business) may become eligible for underemployment insurance.
Regardless of the specific boundary between FT and PT status, there are times when an employer may need to reevaluate an employee’s classification for a valid business reason.
Valid Business Reasons for Employee Reclassification
Here are some situations in which your practice may decide that reclassification is necessary and justified:
- When a FT employee is consistently not working FT hours over a period of time.
- When a PT employee consistently picks up extra hours and reaches FT status, or is consistently needed to work extra hours.
- When the employer must make a change to employee hours for another valid business reason (e.g., a change in staffing needs for the foreseeable future).
Classification Policies in Your Employee Handbook
Your employee handbook should clearly define FT and PT classification, including any relevant information about qualifying for benefits.
It should also state that FT and PT positions and hours are set based on business needs and not employer or employee whims. Don’t fall into the habit of distributing hours based on employee demands — this is a slippery slope!
Whether a particular position is FT or PT should also be included in the employee’s job description.
Additionally, define the length of the measurement period after which employees may be reclassified as FT or PT based on average hours worked. While your business can set this time period, it should be consistent across all employees and not shorter than 3 months.
New employees should sign to acknowledge their receipt of this and all policies contained in your handbook. They should also receive a copy of their job description.
Be Fair and Consistent Towards Employees
Reclassifying employees because they’re habitually working more or less than scheduled should never be a surprise – in part, because employees should be aware of the policy they’ve already acknowledged in your handbook, and in part because you will want to warn the employee ahead of time if reclassification is imminent.
Make sure the employee is aware of the upcoming change at least one pay period in advance, but further if possible (especially if they have simply not been working their FT schedule and could potentially self-correct the situation).
Advance notice of the situation and the reasons for it can do a great deal to mitigate any shock or dismay. Remain calm and provide the valid business reasons why the change is necessary.
Similarly, if you find you must make across-the-board cuts to employee hours – for instance, for budgetary reasons or if the practice as a whole is reducing its hours of operation – be fair, be compassionate, and give as much advance notice as you can. Employees will probably not be happy about the situation, but if they see that you are trying to be fair, they may be willing to stay.
In all of these circumstances, enforcing your FT/PT employee classification policies in a fair and consistent manner is essential to avoiding excessive turnover and the complaints of disparate treatment, discrimination, or retaliation that can lead to lawsuits.
Conclusion
Generally speaking, employers have discretion with respect to the number of hours an employee must work each week to qualify as a full-time (FT) employee, though there are some notable exceptions for employers who offer a company pension or profit sharing plan, as well as for those who employ 50 or more employees.
Make sure the work requirements for FT and PT employees are outlined in your employee handbook and each employee’s job description, and set the FT requirement below the standard 40 hour threshold to prevent employees from creeping into overtime or collecting underemployment insurance.
There are a handful of valid business reasons that might justify reclassifying an employee from FT to PT status or vice versa. But, when it becomes necessary to reclassify an employee, be sure to give advance notice of your intention to do so.
Finally, when considering reclassifying an employee’s status as FT or PT, work with a qualified HR professional to ensure that you’re doing so correctly, and that you are taking the proper steps to prevent potential legal blowback.
CEDR Members can submit an HR Request in your Members Area for help with reclassification.
Non-members can join the discussion in our private, professional Facebook Group, HR Base Camp, to crowdsource answers to your HR questions from CEDR’s HR experts, as well as thousands of other practice owners and managers.
Updated October 2, 2020; Originally published March 18, 2015
