Types of Employee Classification

Types of Employee Classification
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  • 0:00 Purpose of Employee…
  • 0:42 Full-Time Employees
  • 1:35 Part-Time Employees
  • 1:57 On-Call Employees
  • 2:24 Independent…
  • 3:12 Lesson Summary
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Lesson Transcript
Instructor: Tammy Galloway

Tammy teaches business courses at the post-secondary and secondary level and has a master's of business administration in finance.

We'll discuss four main types of employees: full-time, part-time, on-call and intern. We'll also define 'independent contractor' and discuss the difference between independent contractors and employees.

Purpose of Employee Classifications

Jorge has been out of work for several months. Instead of relying on the state's employment services, he decides to send his resume to a staffing agency. A staffing consultant, Erin, asks Jorge to come in, complete paperwork and take an assessment.

After Erin interviews Jorge and reviews his assessment scores, she provides an overview of the hiring process. Erin explains to Jorge that he needs to understand the various types of employee classifications if a firm contacts him for a job. Employee classifications are how employees are defined as it relates to hours, benefits and retirement.

Full-Time Employees

Full-time employees work at least 40 hours per week. There are two types of full-time classifications: permanent and temporary.

Permanent workers' employment is considered ongoing and does not have an end date. Permanent employees are able to participate in the company's benefit plans, such as health and dental insurance and retirement.

Temporary full-time employees are only allowed to work up to 180 days and must be converted to regular full time employment or released from employment after 6 months. Additionally, they're not eligible to participate in insurance plans but are qualified to contribute to retirement plans.

Erin shares with Jorge that companies may hire him as full-time temporary to see if he's a good fit. If he is, they might offer him a permanent position. She points out that punctuality and competence are important if he's interested in becoming a permanent employee.

Part-Time Employees

Temporary and permanent part-time employees each work less than 40 hours per week. Permanent part-time workers' employment is ongoing, while temporary workers are employed up to 180 days, at which time they're hired as a permanent part- or full-time employee or released. The decision whether these workers are offered benefits or retirement is entirely up to executive management.

On-Call Employees

On-call employees are hired on an as-needed basis and understand they work varied hours per week or per month. These employees typically do not participate in benefit or retirement plans, and their status is evaluated every 180 days.

Erin explains to Jorge that this type of employee is rarely extended an offer since his or her responsibilities and duties are typically not essential to the business' daily or weekly operations.

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