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Having Full-Time or Part-Time Employees
As a business owner, when another person performs work for you, you must first correctly classify that person as an independent contractor or employee before you can know how to treat payments that you make to that person.
If you plan to hire one or more employees within Arizona, you will be subject to bothfederal and staterequirements. Below are some resources to help connect you to the information you need. You may also wish to consult with youraccountant or attorneyfor assistance.
Federal
- As an employer, you must withhold employment taxes from your employee’s wages. In addition, you need an Employer Identification Number (EIN). (12)
Apply online:Employer Identification Number (EIN)
Download:Application for Employer Identification Number (SS-4)
Contact:
Internal Revenue Service (IRS): Employer ID Numbers
Attn: EIN Operation, Cincinnati, OH 45999
Phone: 800.829.4933 (7am -10pm local time, Monday-Friday) - You generally must withhold federal income tax from your employee's wages. To figure how much to withhold from each wage payment, use the employee’s W-4 form and the methods described in the IRSPublication 15, (Circular E), Employer's Tax GuideandPublication 15-A Employer's Supplemental Tax Guide.(12)
Download:Form W-4, Employee’s Withholding Allowance Certificate - Social security and Medicare taxes pay for benefits that workers and families receive under the Federal Insurance Contributions Act (FICA). Social security tax pays for benefits under the old-age, survivors, and disability insurance part of FICA. Medicare tax pays for benefits under the hospital insurance part of FICA. You withhold part of these taxes from your employee’s wages and you pay a matching amount yourself. All employees must have a social security card.
As an employer, it is now your responsibility to report payroll information annually to the Social Security Administration and to your employees. Visit Social Security Administration (SSA) Business Services Online information for large and small business/tax filers.
Social Security Administration:Employer W-2 Filing Instructions & Information
Social Security Administration:Electronic Fact Sheet: If You Are Self-Employed
Note: Self-employment tax applies to self-employed workers and is their contribution to social security. It is generally paid by sole proprietors, self-employed farmers and members of a partnership. Explanatory publications are available online at theInternal Revenue Service- Small Business and Self-Employed Tax Center. - The federal unemployment tax is part of the federal and state program under the Federal Unemployment Tax Act (FUTA) that pays unemployment compensation to workers who lose their jobs. You report and pay FUTA tax separately from social security and Medicare taxes and withheld income tax. You pay FUTA tax only from your own funds. Employees do not pay this tax or have it withheld from their pay. FUTA taxes are reported on Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return to IRS.
Internal Revenue Service - Employment Tax Forms
Download:Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return - All U.S. employers must verify the identity and employment authorization of each individual they hire for employment in the United States through completion of Form I-9, Employment Eligibility Verification. TheHandbook for Employers M-274provides guidance for completing Form I-9 (Employment Eligibility Verification Form). (18)
Contact:U.S. Citizenship and Immigration Services (USCIS), Form I-9 Contact Center, I-9 Central,888.464.4218
State
- Employers paying wages to employees for services performed in the state must register to remit withholding tax. The Arizona Joint Tax Application is used to register for your employer withholding/unemployment insurance license. The application is called "Joint" because it is used by both the Departments of Revenue and Economic Security.
Register Online:Businesses>Enroll to File and Pay Online(for Employer Withholding and Unemployment Insurance License)
Download Form:Joint Tax Application for a TPTLicense (JT-1)
Contact:
Arizona Department of Revenue:Arizona Withholding Tax
602.255.3381 or toll-free 800.843.7196 (from area codes 520 and 928)
Contact:
Arizona Department of Economic Security - Questions Regarding Unemployment Tax
Arizona Department of Economic Security (DES):Unemployment - Employer
Unemployment Insurance Tax (UIT) - Frequently Asked Questions
602.771.6602 - Under Arizona law, it is mandatory for employers to secure workers’ compensation insurance for their employees. Workers’ compensation is a “no fault” system in which an injured employee is entitled to receive benefits for an industrial injury, no matter who caused the job-related accident. Employers are required to bear the entire cost of workers' compensation insurance.
Companies may choose to insure their employees byinsuring withan authorized carrier of the state, or by qualifying as a self-insurer under the rules and regulations of the Industrial Commission of Arizona. (17)The Arizona Department of Insurance and Financial Institutions (DIFI) can verify if a company is licensed and authorized to sellworkers’ compensation insurance in the State of Arizona.
Contact:Arizona Department of Insurance and Financial Institutions (DIFI), Consumer Affairs Division,602.364.2499 or 800.325.2548
The Industrial Commission of Arizona administers the Workers' Compensation Law.(17)
Contact:
Industrial Commission of Arizona, Claims Division:What Is Workers' Compensation and How Does It Work?
Phoenix area 602.542.4661 or Tucson area 520.628.5181 - On October 1, 1998, the Arizona New Hire Reporting Program from the Arizona Department of Economic Security, Division of Child Support Enforcement was established.State and federal law requires all employers to report each new and rehired employee to the State Directory of New Hires within 20 days of their hire date.
Contact:Arizona New Hire Reporting Center,888.282.2064 - Arizona law requires employers in Arizona to use the “E-Verify” system (a free Web-based service offered by the federal Department of Homeland Security) to verify the employment authorization of all new employees hired after December 31, 2007.
E-Verify:Enroll in the Program
The Arizona Attorney General's Office web site provides basic information about theLegal Arizona Workers Act, sometimes called the “Employer Sanctions Law,” as amended.
Additional Information: U.S. Department of Labor (DOL), elaws:Information aboutFederal Employment Laws Industrial Commission of Arizona (ICA), Labor Department:Information on State Labor Laws/Youth Employment/Wages Occupational Safety and Health Act of 1970
Employer Handbook on Unemployment Insurance Tax: Apublication of the Arizona Department of Economic Security to help you understand the Employment Security Law of Arizona and the withholding provisions of the State Income Tax regulations.Fair Labor Standards Act (FLSA)
The Fair Labor Standards Act (FLSA) is a federal law administered by the Wage and Hour Division of the U.S. Department of Labor (DOL). This law establishes minimum wage, overtime pay and child labor standards for employers. The Industrial Commission of Arizona (ICA) has jurisdiction over all businesses in the state that are not covered by the FLSA. The Industrial Commission also shares jurisdiction with the Wage and Hour Division when both federal and state laws are the same. Visit the DOL websitefor easy-to-understand information about a number of federal employment laws. In addition, visit the ICA website. (17)
The Industrial Commission of Arizona, under the Occupational Safety and Health Act of 1970, is the state agency charged with regulating industrial plants for fire, health and safety requirements. The safety standards enforced in Arizona are the same standards used by the U.S. Department of Labor. Arizona provides a consultation program from which businesses can obtain information to determine whether their facilities are in compliance with safety standards. For information on the State Plan Osha Program, visit OSHA’s website. (21)
Industrial Commission of Arizona, Arizona Division of Occupational Safety and Health (ADOSH) U.S. Department of Labor- Occupational Safety & Health Administration (OSHA):Occupational Safety and Health Act of 1970
OSHA’s “Safety Pays” Program Provides Planning Tool for Businesses: Interactive tool to help employers approximate the costs of occupational injuries and illnesses and the estimated impact on a company’s profitability.
U.S. Department of Labor, Occupational Safety and Health Administration, Help for Employers: How to comply, go beyond compliance, and improve your bottom line
U. S. Equal Employment Opportunity Commission (EEOC):Information is available from the U. S. Equal Employment Opportunity Commission (EEOC) for small businesses including a brief fact sheet, a booklet concerning the laws enforced by EEOC, and information concerning the mediation program which you are encouraged to consider in the event a charge of discrimination is filed against your business. Governor's Office of Equal Opportunity:The mission of the Governor's Office of Equal Opportunity (GOEO) is to prepare, revise and administer the State of Arizona Equal Opportunity Guidelines for equal employment opportunity and economic growth as outlined in Executive Order 93-20.
Phoenix District Office:602.640.5000 or 602.640.5052 or 602.640.5024or 800.669.4000
Maricopa Skill Center, division of GateWay Community College:Offers quality driven, workforce training programs.Coming soon are the following Green Technology Certifications: Solar Photovoltaic Installer, Solar Thermal Installer, Energy Auditor and Alternative Wall System Installer.These programs are developed in partnership with the City of Phoenix.
The Arizona Department of Insurance and Financial Institutions (DIFI) websiteprovides health insurance resources such as publications, compared premiums, complaint ratios, health insurance resources, and more.
IRS Tax Information for Businesses:If you decide to hire full-time or part-time employees, visit the IRS website for tax information for businesses.
Internal Revenue Service - Tax Information for Retirement Plans Community:Forms, publications and information on how to start, maintain and administer a retirement plan. SIMPLE (Savings Incentive Match Plan for Employees of Small Employers) IRA Plan: Provides employers and their employees with a simplified way to contribute toward retirement. Employers Council: Non-profit membership organization, founded in 1939, designed to partner with employers to maintain effective employer/employee relationships. A "one-stop shopping" resource for members in the areas of human resource management, employment law, surveys and training. (22)
U.S. Department of Labor's Employee Benefits Security Administration (EBSA)
Compliance Assistance > For Small Businesses
SIMPLEIRA Plans for Small Businesses
Toll free: 866.444.EBSA (3272)
602.955.7558or Arizona toll free 800.437.9262
FAQs
How do you answer full-time or part-time? ›
If you know you'd like a full-time job, you can say so, and briefly explain why you're qualified for a full-time position. Provide an explanation: If you know you don't want a full-time job, explain (briefly) why you prefer a part-time or temporary job.
Is it better to work part or full-time? ›Though part-time work doesn't come with the stability and job security of full-time work, part-timers experience a more flexible work schedule they can fit around their other commitments. Part-time hours may fit better into your full-time parenting schedule or let you return to school part-time.
What are the pros and cons of hiring a full-time versus a part-time employee? ›Full-time employees can offer your business security in scheduling, regularity in product or service flow, and overall consistency for your labor management. Part-time employees can save your company money because you won't have to pay as much when there are dips in workflow, or offer healthcare and other benefits.
Why do you think businesses would choose to hire more part-time workers than full-time workers? ›Hiring part-time employees has distinct advantages, including the following: You'll spend less money on part-time employees: It's less expensive to pay for fewer work hours, and a lean but efficient workforce is essential for businesses living close to the balance sheet.
How do you answer the availability question? ›During the interview, emphasize your availability when you speak and express your will to offer quality work. If you are flexible, explain that you are willing to work every day of the week and additional hours if necessary. If you are ready to work in the evening or weekend, say it without any hesitation.
How do you answer part-time interview questions? ›A tip on flexibility
Keep your options open! Don't be too rigid about exactly how many hours you want to work each day, and the precise start and finishing times. If you're completely inflexible about your part-time hours, you'll find job opportunities are limited.
- Pros of hiring part-time employees.
- Greater flexibility.
- Cost-effective solution.
- Seasonal support.
- Expanded pool of candidates.
- Cons of hiring part-time employees.
- Less invested in your company.
When you work 30 hours or fewer per week, you can enjoy more personal time in which to focus on your family, friends and hobbies. This also enables you to pursue special interests or education. Having more free time is a great benefit to those seeking a better work-life balance.
Are part-time workers happier? ›Previous research shows that both partnered men and women report higher levels of life satisfaction and well-being when working part-time compared to working full-time. Other research suggests that time spent working is correlated with happiness.
What are some of the benefits to hiring an employee full-time rather than an independent contractor? ›Lower cost. You will have to pay your contractor the agreed-upon wages, but you are not responsible for the additional costs and obligations that come with an employee, such as workers' compensation, overtime, employment taxes, benefits, FMLA and ERISA. Keep in mind that, with contractors, you get what you pay for.
What are some differences between part-time and full time employment? ›
A full-time employee works an average of at least 30 hours per week or 130 hours per month for more than 120 days in a year. A part-time employee works an average of fewer than 30 hours per week or fewer than 130 hours per month for more than 120 days in a row.
Is using part-time employees rather than full-time employees ethically and socially responsible explain? ›Answer and Explanation:
Using part-time employees is not inherently unethical and irresponsible simply because there are many people out there who would benefit from such an opportunity (i.e., high-school students).
Wage compression can occur when a company has a history of infrequent raises or salary increases. It may also occur if a change in leadership, structure or market calls for the company to entice new talent by using higher wages or higher total compensation packages.
What is the purpose of a part-time employee? ›There are many reasons employers decide to hire part-time employees as opposed to full-time workers. Hiring part-time employees can: Reduce the cost of paying full-time salaries, health care premiums, and other expenses. Alleviate workforce stress by getting extra help on projects.
What are the advantages and disadvantages of a part-time job? ›| Helps you gain work experience | Lack of job security |
| Good Money | Lack of extra benefits |
| Money management | Can effect your study |
| Opportunity of networking | Health problem |
| Management of time |
The Bureau of Labor Statistics (BLS) defines full-time as 35 hours and above, and the Fair Labor Standards Act (FLSA) doesn't define what constitutes full-time or part-time hours, but does require employers to pay overtime to employees for any weekly hours worked above 40.
How do you describe your availability? ›I am available to work Monday through Friday, and I am very flexible about the start and end times on those days. I'm willing to make occasional additional hours work with my schedule, as I really value my weekend time with my family. I'm more than willing to go above and beyond during the standard workweek.