According to Human Resources terms, employee type means various categories of employees an organization or company hires to perform different tasks. However, an organization must evaluate each category of employee's legal duties and regulations properly.
Why is Employee Type Important?
"Employee Type" knowledge can help a company grow and achieve targets easier. It gives the employer the benefit of making a suitable choice for the company when hiring someone new. Knowing the employee types is also more efficient in hiring skilled employees for a particular position.
Employee type is also essential law-wise. Companies have legal conditions for fulfilling a project, so understanding various employee categories ensures that a company fulfills those conditions. Moreover, a company can easily modify its employees' needs depending on economic fluctuation and productivity rate if they have accurate knowledge.
An employer must also keep knowledge of employee classification to avoid law violations. However, if the company mixes it up, it can violate labor laws. For example, a full-time employee can get maximum paid time off (PTO) and healthcare coverage, but this is different for part-time employees.
What are the Different Employee Types?
Organizations can hire different employees for several reasons. That is why it is essential to know each type of employee. A brief informative list of various employee types can come into great use.
1. Part-Time Employees
Employees are considered part-time when they are not working 40 hours a week. However, the company still considers a worker working 40 hours a week part-time.
Part-time employees can often choose their working hours to benefit themselves. Their salary is mainly based on work hours instead of a fixed monthly salary.
Moreover, employers cannot legally provide part-time employees benefits like paid holidays and health coverage. However, many companies are now taking the approach of offering part-time employees additional benefits.
2. Full-Time Employees
The United States has no official specification for part-time and full-time employment hours. It will depend on the company, which usually ranges between 36 and 40 hours. However, there might be state laws specifying the work hours.
A full-time employee can either be paid hourly or a fixed salary. But, an employer must provide full-time employees benefits, like PTO, health coverage, and 401Ks, as stated by Federal and State Labor Laws.
Some laws may also require organizations to pay for full-time employees’ paternity or maternity leave.
3. Seasonal Employees
Companies usually hire seasonal or temporary employees through different agencies during the peak season of the business and only hire them for a limited period. Seasonal employees are not typically provided company benefits because of their temporary employment contracts.
However, seasonal employees are entitled to unemployment benefits and Social Security as they are technically not employed for the long term.
4. At-Will Employees
Most employees in the United States are at-will employees. They can quit or go on strike without any early notice to their employers. However, the situation is the same for employers. Companies can dismiss an at-will employee for legal terms without prior warning.
5. Independent Contractors
Independent contractors provide services to organizations maintaining an official contract for a specific period. The agreement can be for six months or even a year.
Independent contractors are specifically hired to cater to the employers' needs and provide them with a specific service. Moreover, these employees will not have company benefits and must work with their supplies.
However, companies are not permitted to withhold tax from independent contractors. They must file their ownIRS Form 1099-MISC, and the company must ensure not to misclassify the employees.
Subcontractors are people or organizations legally required to carry out the tasks assigned to them by another person or organization.
7. Leased Employees
Professional Employer Organizations hire leased employees and then put them on a contract to work for another organization. Some leased employees are hired for a year, and others for longer. However, the leased employees remain on the PEO's payroll, and the PEO will give any benefits rather than the organization that "hired" them.
8. Tenured Employees
Tenured employment usually applies to professors or academic teachers. They are individual employees whom employers cannot dismiss without proper reasons. Moreover, tenured employees have job security to put forward controversial research or findings without fear.
Companies hire interns to welcome new talent and find hidden skills. They usually work under higher management and are more focused on desk jobs. Companies can hire interns as full-time employees after they complete their internship.
According to theFair Labor Standards Act, an intern can be paid or unpaid; however, companies can maintain specified federal laws to deem them, unpaid workers.
Artists, content creators, writers, and photographers often work as freelancers. Freelancers are not classified as permanent employees as they are self-employed and can take on work from other companies. However, a company can have a contract with them yearly.
Consultants are self-employed individuals or organizations offering professional guidance to any company that needs it. Any company can temporarily take a consultant's service and frequently return for more help based on its needs.
However, a company can hire its consultant and treat them like full-time employees by providing them with the same benefits and salary.
12. Job-Share Employees
Job-share employees usually share the same full-time role in a company. The company splits the work and salary between the employees, and they receive company benefits on a pro-rata basis.