Employment Status

Tanner Pierce, PHR
As an employer, it is important to understand the different employment statuses and what they mean for you, your company and your employees. Employment status helps set expectations between an employer and employee in regards to what is expected of them.

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What Is Employment Status?

Employment status is the kind of work that an employee and an employer agree to when a work contract is signed and agreed upon. It sets the basic parameters of what type of employee the employee is being hired to be. These statuses include labels like full-time, part-time, or seasonal worker.

Why It’s Important To Understand Employment Status

It is important to understand employment status so that companies are compliant, employees understand job expectations and HR professionals can attract the best talent through your recruiting efforts. All of these elements may not be handled properly if you don’t take the necessary time to understand job statuses and the different types of job statuses.

  • Laws and Regulations. Every job status might have different laws and regulations that apply to them. So, it is important to make sure that an employee has the correct job status, and to be aware of the correct laws and regulations. Some of those regulations might include benefits, work hours, what kind of work is available and length of employment. Having clear, defined job statuses and understanding them will help you as an employer understand what laws and regulations apply to any given job status.
  • Job Expectations. When defining a role to an employee, you always want to set the right expectations for the employee. If you don’t have clear expectations for the role, this can lead to disgruntled employees that ultimately decide to leave. As part of setting expectations with employees, part of that includes explaining to them their job status and everything it entails. Employees want to know what they can expect from work, especially how often they are expected to work. Understanding job statuses helps employers set the correct job expectations with employees.
  • Recruiting. When recruiting to fill a position, you need to know what kind of job you are posting and recruiting. If you don’t understand job statuses, this can lead to confusion with candidates that will ultimately deter them from working for you or even applying for the job. When a candidate applies for a job, one of the first things they look for is to see what kind of job it is. You always want the job status to be listed on the job posting. By doing this, it will save candidates time and attract the right candidates for the job.

Types of Employment Status

There are many different work arrangements that the employer and employee can agree upon. Here are just a few of the most common ones:

Full-Time

Full-time employees are employees that work 30 or more hours per week and are in a permanent position. Exempt, salary employees generally fall under this category. These are typically the jobs that are most sought after. They also tend to attract the best talent as you can find people who have the most education and experience. People in full-time positions are also more likely to stay at the position and be more committed to it.

A downside of a full-time employee can be the cost of them on your company. Full-time employees qualify and are eligible for any company sponsored health plans. This is a cost that an employer will help pay for every full-time employee enrolled in health insurance. Another downside of full-time employees can be complacency. Full-time employees might be more prone to complacency as they can feel safe and comfortable within their role. They might no longer see the need to work hard to prove their worth to the company.

Part-Time

Part-time employees are employees that work less than 30 hours. These employees are generally paid on an hourly basis but can also be paid by contract. These employees can be a big benefit for a company as they offer a bit more flexibility. You can have part-time employees that work only 5 hours or up to 29 hours a week. That allows for employers to have part-time employees only work as much as needed for the company. If you are a company that has fluctuating hours from week to week, then having many part-time employees might be recommended. Part-time employees also don’t cost companies as much money since the employees aren’t working as much and part-time employees don’t qualify for benefits. Part-time jobs also generally have a lower rate of pay than full-time jobs.

It is not all good with part-time jobs though. Part-time employees tend to be not as committed to their job, and they’re frequently more willing to jump from job to job. Part-time employees might not also be as specialized in their job due to the lack of experience, education or time spent doing the specific job.

Temporary

Temporary employees are employees that are hired for only a temporary amount of time. These jobs are most often found through staffing agencies or through an employee hired on a contract for a duration of time. This can be a beneficial job arrangement to employers since you already know how much money this employee will get paid for the job they are doing. If you have a specific monetary value placed on a project, you can pay that employee for that job and not have to worry about paying too much or the employee taking too much time on that job. Temporary jobs can also act as a trial period for some employers. In staffing agencies, temp-to-hire is commonly used. Some employers might not be sure if they want to hire an employee, or if they will have a need for an employee in a position. By hiring them as temp-to-hire, this allows the employer to see if an employee will work well in the position, as well as if the position itself is needed.

One big downside of temporary positions is that they don’t always attract the best talent. Some people are deterred from applying for a temporary job because they don’t want to be left without a job after the assignment is up. Some candidates are looking for more stability, and temporary jobs don’t offer that. Temporary jobs can also be hard to fill because they are constantly opening up due to employees not being committed to the job, often leading to no-shows. Having a bunch of temporary employees can also be hard to create a company culture, as these employees know they will only be there for a short amount of time.

Seasonal

Seasonal employees are similar to temporary employees. They are hired for only a short period of time. However, seasonal employees’ length of employment is typically geared toward specific times of year and for shorter lengths than temporary jobs. For example, seasonal employees might be hired to work during the Christmas holiday. They will only work for that month. Their hours tend to be set but can still vary depending on the needs of the business. Or an employee might be hired for a seasonal summer job. In regards to laws and regulations, for the most part the ones that apply to a temporary job status will apply to a seasonal job status.

Seasonal employees tend to be more committed than temporary employees. They might be more passionate about the kind of work they are doing (holiday season, summer camps, etc). Due to the time of year, it can be easier to find employees for seasonal work since it coincides with the holiday season or summer time. A con of seasonal work is that you can still get employees that aren’t as committed to the job. You’ll often get a mix of committed and uncommitted employees when doing seasonal work.

What Kinds of Employees Should You Hire?

It depends on the needs of your company. Every kind of employee has its pros and cons. Ultimately, you need to figure out the needs of your company. Make sure that you consult the HR department and your hiring manager to understand what kind of hires to make. Some employers attempt to cut corners or be cheap based on the hire they make. Don’t cut corners, but listen to hiring managers and understand their needs for their department.

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Questions You’ve Asked Us About Employment Status

How does employment status differ outside the United States?
It will depend on the country the employee is working in. Refer to country employment guidelines for international employees.
How do taxes differ for different employment statuses?
Taxes will only differ depending on the amount of hours an employee works. The one expectation is that taxes can differ if you are an independent contractor and not considered an employee of a company.
Tanner Pierce, PHR

Tanner has over 4 years of HR professional experience in various fields of HR. He has experience in hiring, recruiting, employment law, unemployment, onboarding, outboarding, and training to name a few. Most of his experience comes from working in the Professional Employer and Staffing Industries. He has a passion for putting people in the best position to succeed and really tries to understand the different backgrounds people come from.

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