Full-Time Equivalent (FTE) is a unit of measurement used to standardize the number of full-time employees in a workforce, accounting for part-time employees as well. It represents the total number of hours worked by all employees (both full-time and part-time) divided by the number of hours considered to be a full-time workweek (usually 40 hours). For example, if two part-time employees each work 20 hours a week, they would together equal one FTE. FTE is commonly used in workforce planning, budgeting, and compliance with labor laws, such as the Affordable Care Act (ACA), which requires businesses of a certain size to offer health insurance based on the number of FTEs.
