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Unit 9: Staffing

Full-time vs. Part-time Notes

The definition of full-time versus part-time is more straightforward. Part-time status applies to
individuals who, on the average, work less than 24 hours a week in a year for your company.
Any employee who works more than 1,000 hours in a year is considered a full-time employee
and is thereby eligible for the same benefits afforded your other full-time employees - paid
vacation and holidays, access to health benefits, sick leave, etc. Because the status is based on
average hours, the part-time worker can, in fact, be scheduled for more than 24 hours in a given
week. Part-time workers are also eligible for overtime after 40 hours in a workweek.
In general, all independent contractors are considered employees unless it can be shown that
they are not. The IRS has provided a 20-question guideline in regard to this with the two most
important tests pertaining to direction and control. When you, the employer, specify work
hours, location and method, the worker is classified as an employee. On show site, you have an
advantage that the skilled technician is not necessarily under your direct control, probably
provides his or her own tools, and is paid for the job, not just his or her time. When you hire
freelancers to work in your shop, you take control over when, where and how they perform
their service. Interpretation of these criteria will vary from state to state and auditor to auditor,
but in general, that individual is acting as your employee.
About now, a little voice in your head is probably screaming, "Everyone uses freelancers, and no
one calls them employees!"
It's indeed an industry-accepted practice to hire independent contractors on an hourly rate with
some sort of guaranteed minimum booking. This could be a stagehand for a four-hour call at $10
an hour, or a camera operator for $250 a day based on a 10-hour day. In theory the contractor is
responsible for filing his or her own taxes, receives no company benefits from your firm, and is
not eligible for unemployment benefits at job's end.
In a perfect world, there is no reason to challenge these practices. However, many companies
unintentionally create an employee-employer relationship. Some common practices that
undermine independent contractor status include the employer doing any or all of the following:
defining work periods, specifying pay rates, supervising all work, providing training, or using
the contractor in the same nonexempt activities as its other employees. When any of these
circumstances exist, the worker may become eligible for unemployment benefits when the job
is over or workers' compensation if he gets hurt on the job. If he qualifies as a full-time employee,
then you might be liable for additional benefits as well. If there is some doubt as to the status of
the worker, classifying him as an employee poses fewer potential risks to the employer.
So what makes the independent contractor truly independent? The key is for the freelancer to
behave like a business, which involves three conscious steps. First, the freelancer needs to
operate under a business name; second, he or she needs to have a tax number (that is, an
Employer Identification Number - not a Social Security number) and provide it to you on a
W-9 form; and third, he or she must provide proof of workers' compensation and general
liability insurance.
It's possible for an individual to do all of these without incorporating or incurring significant
costs in most states. Other states may require as much as 4 percent of wages to cover workers'
comp. You should expect your freelancer to pass this cost on to you.
Playing it safe: Many labor experts maintain that the only real defense against a future workers'
comp claim from freelancers is to require them to provide proof of their own coverage before
the job starts.

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