Full-Time Employee

What Is a Full-Time Employee?

A full-time employee is a worker who regularly works at or above a designated hourly threshold set by the employer or required by law. Unlike exempt vs. non-exempt or employee vs. contractor classifications, there is no single legal definition of "full-time" in California for most purposes. The classification matters primarily for benefit eligibility and certain regulatory requirements.

Understanding full-time status is essential for California employers because it affects healthcare obligations, benefit administration, scheduling practices, and regulatory compliance.

Full-Time Thresholds by Context

Different laws and purposes use different definitions of full-time:

By Regulatory Purpose

Context	Full-Time Threshold	Authority
Affordable Care Act (ACA)	30 hours/week average	Federal law
California large employer healthcare	30 hours/week	CA Health & Safety Code
ERISA benefit plans	Employer-defined (typically 30-40 hours)	Plan documents
Overtime eligibility	N/A - based on hours worked, not status	Labor Code
California paid sick leave	N/A - applies to all employees	Labor Code
Family leave (CFRA/FMLA)	12+ months, 1,250+ hours worked	State/Federal law

Common Employer Definitions

Industry	Typical Full-Time Threshold
Retail	30-35 hours/week
Restaurant/Hospitality	30-35 hours/week
Healthcare	36-40 hours/week
Manufacturing	40 hours/week
Office/Professional	40 hours/week
Nonprofit	32-40 hours/week

ACA Full-Time Definition

The Affordable Care Act has the most significant legal impact for full-time classification:

Applicable Large Employers (ALEs)

Employers with 50 or more full-time equivalent (FTE) employees must:

1. Offer minimum essential coverage to full-time employees
2. Coverage must be affordable (employee contribution limits)
3. Coverage must provide minimum value (60% actuarial value)

Calculating Full-Time Status Under ACA

Standard measurement: Average 30+ hours per week OR 130+ hours per month

Look-back measurement method:

Period	Duration	Purpose
Measurement period	3-12 months	Determine average hours
Administrative period	Up to 90 days	Process enrollments
Stability period	6-12 months	Maintain coverage

Example calculation:

Month	Hours Worked
January	140
February	125
March	135
April	145
May	120
June	138
Average	133.8

Result: Employee averages 133.8 hours/month (over 130), qualifies as full-time under ACA.

ACA Penalties for Non-Compliance

Violation	Penalty (2024)
No coverage offered (4980H(a))	$2,970 per full-time employee annually
Coverage not affordable/minimum value (4980H(b))	$4,460 per affected employee

California Healthcare Requirements

Large Employer Healthcare Mandate

California employers with 50+ employees face state healthcare requirements:

Requirement	Details
Offer coverage	To employees working 30+ hours/week
Waiting period	Maximum 60 days
Premium sharing	No specific minimum
Reporting	Annual disclosure requirements

San Francisco Health Care Security Ordinance (HCSO)

San Francisco requires covered employers to make health care expenditures:

Employer Size	Expenditure Rate (2024)
20-99 employees	$2.12/hour (for employees working 8+ hours/week in SF)
100+ employees	$3.18/hour

Benefits Tied to Full-Time Status

Commonly Restricted to Full-Time Employees

Benefit	Typical Requirement
Health insurance	30+ hours/week
Dental/vision	30+ hours/week
Retirement plans	Varies by plan
Life insurance	30+ hours/week
Disability insurance	30+ hours/week
Paid vacation	Often prorated or full-time only
Tuition reimbursement	Full-time only

California Requirements Apply to ALL Employees

These protections apply regardless of full-time or part-time status:

Protection	Applies To
Minimum wage	All employees
Overtime	All non-exempt employees
Meal breaks	All non-exempt employees
Rest breaks	All non-exempt employees
California paid sick leave	All employees (accrual varies)
Workers' compensation	All employees
Anti-discrimination	All employees
Wage statements	All employees

Full-Time Classification Best Practices

Establishing Clear Definitions

In employee handbooks:

Full-Time Status: Employees regularly scheduled to work 30 or more
hours per week are considered full-time and eligible for the
Company's benefit programs, subject to applicable waiting periods
and plan requirements.

Key elements to define:

• Hours threshold (e.g., 30 or 40)
• Measurement period (e.g., weekly average over a month)
• How to handle variable schedules
• Impact on benefits eligibility

Managing Variable Hour Employees

For employees with fluctuating schedules:

Challenge	Solution
Unpredictable hours	Use measurement periods to average
Seasonal fluctuations	Look-back periods capture averages
On-call work	Include on-call hours if "engaged to wait"
Multiple positions	Combine hours across all positions

Tracking Hours Accurately

Method	Best For
Time clock/badge	Hourly workers, multiple shifts
Timesheet software	All hourly employees
Scheduling integration	Restaurants, retail, hospitality
Project tracking	Professional services

Full-Time Scheduling Considerations

California Predictive Scheduling

While California doesn't have a statewide predictive scheduling law, several cities do:

Jurisdiction	Key Requirements
San Francisco	Retail - 2 weeks advance notice
Emeryville	Retail/fast food - 2 weeks advance notice
Los Angeles	Retail - 14 days advance notice
San Jose	Limited requirements

Scheduling Best Practices

For full-time employees:

1. Consistent schedules: Provide regular, predictable hours when possible
2. Advance notice: Give schedule at least 2 weeks ahead
3. Hour tracking: Monitor approaching overtime thresholds
4. Break compliance: Build in required meal and rest periods
5. Documentation: Maintain records of scheduled and actual hours

Avoiding Unintended Overtime

Full-time employees often approach overtime thresholds:

Issue	Prevention Strategy
Daily overtime (8+ hours)	Schedule shifts under 8 hours when possible
Weekly overtime (40+ hours)	Monitor cumulative weekly hours
7th day overtime	Rotate schedules to avoid 7 consecutive days
Pre/post-shift work	Clear policies on clocking in/out

Converting Between Full-Time and Part-Time

Reducing Hours (Full-Time to Part-Time)

Employer considerations:

Factor	Action Required
Benefits eligibility	Notify of coverage changes
COBRA rights	Offer continuation if losing coverage
Stability period (ACA)	May need to maintain coverage
California WARN Act	Mass reductions may trigger notice
Handbook compliance	Follow stated policies

Employee notice: Provide written notice of status change and impact on benefits.

Increasing Hours (Part-Time to Full-Time)

Factor	Action Required
Benefits eligibility	Enroll in benefits per waiting periods
ACA compliance	Add to coverage within 90 days
Payroll adjustments	Update status in systems
Documentation	Written confirmation of change

Special Full-Time Situations

Multiple Jobs with Same Employer

When an employee works multiple positions:

Situation	Treatment
Hours combined	Total hours determine full-time status
Overtime	Combined hours count toward overtime
Benefits	Eligibility based on combined hours
Different rates	Regular rate calculated on all compensation

Temporary Full-Time Assignments

When part-time employees temporarily work full-time:

Duration	Impact
Brief periods	Status generally unchanged
Extended periods	May trigger benefits eligibility
ACA measurement	Include in hour calculations
Documentation	Record reason for temporary increase

Exempt Employee Full-Time Status

Exempt employees have unique considerations:

Factor	Treatment
Hours worked	Generally expected to work "full-time"
Minimum hours	No legal minimum, but typically 40+
Reduced schedule	May affect exempt status if salary reduced
Benefits	Usually automatically eligible

Common Full-Time Classification Mistakes

Mistake 1: Arbitrary Hour Caps

Problem: Keeping workers at 29.5 hours to avoid full-time classification

Risks:

• ACA penalties if workers actually average 30+ hours
• Morale and turnover issues
• Potential discrimination claims if applied unevenly

Better approach: Use proper measurement periods and make legitimate business decisions about staffing needs.

Mistake 2: Ignoring All Hours Worked

Problem: Only counting scheduled hours, not actual hours

Example: Employee scheduled for 28 hours consistently works 32 due to business needs.

Result: Employee may be full-time under ACA, entitled to benefits.

Solution: Track actual hours worked, not just scheduled hours.

Mistake 3: Inconsistent Classification

Problem: Two employees work similar hours but are classified differently

Risks:

• Discrimination claims
• Benefits disputes
• ACA penalties

Solution: Apply consistent, documented criteria to all employees.

Mistake 4: Confusing Exempt and Full-Time

Problem: Assuming all exempt employees are full-time and vice versa

Reality:

• Exempt status is about duties and salary, not hours
• Part-time workers can be non-exempt (and often are)
• Full-time workers can be non-exempt (very common)

Recordkeeping Requirements

Hours Documentation

Record	Retention Period
Time records	3 years minimum
Schedules	3 years
Classification documentation	4+ years
Benefits enrollment	Plan term + 6 years
ACA measurement records	7 years

Required Information

For full-time employees, maintain records of:

• Hire date and status
• Hours worked each pay period
• Benefits eligibility and enrollment
• Status changes and effective dates
• Schedule assignments