Employers generally have carte blanche when it comes to employing workers, retaining employees and reducing employee hours and pay. Employers can legally move an employee from full-time status to part-time status for any reason, including the company no longer wanting to employ full-time workers. Nevertheless, being a considerate and responsible employer often requires going beyond what the law requires in the interest of strengthening the employer-employee relationship and building goodwill.
The federal Fair Labor Standards Act contains regulations on minimum wage and overtime pay, as well as exempt and non-exempt employee classification. However, the law doesn't encroach upon an employer's rights to determine employee schedules. Employers can change an employee's schedule from full-time status to part-time status at any time for any reason. Although most states require employers provide some type of advance notification if moving to full-time status to part-time status results in lost wages.
Communication and respect are two aspects of the employer-employee relationship. Extending the professional courtesy by providing advance notice of changing an employee's status from full time to part time is one way to preserve mutual respect between an employer and its employee. Employees generally can handle both good and bad news about their employment status, provided employers give them enough time to contemplate the changes they need to make in light of moving from a full-time job to a part-time one. Employees who receive notice that their employer intends to halve their working hours may want to look for full-time employment elsewhere.
Aside from extending the professional courtesy of notifying employees about schedule changes, under certain circumstances, an employer must give 60 days' notice to legally move an employee from full-time to part-time status. The Worker Adjustment and Retraining Notification Act mandates a 60-day advance notice when an employer cuts working hours by 50 percent. This rule applies when the change affects 50 or more workers for a minimum of six months.
Benefits and Rehire
Responsible employers can ease the burden of reducing a full-time employee to part-time status by discussing options regarding benefits and rehire eligibility. To minimize the impact of moving from full-time to part-time status, employers may consider continuing employer-paid benefits for employees who become part-time workers. Additionally, employers who anticipate restoring their part-time workers to full-time should entertain rehiring employees who left upon getting notice that they would be receiving about half of what they were making as a full-time employee.
In some states, full-time workers reduced to part-time status may have access to a "shared-work" program. A shared-work program helps sustain employment rates through allowing part-time workers to collect unemployment benefits to compensate for wages lost due to transitioning from full-time to part-time status. Other state laws, such as the "20 percent rule" in Texas, consider reducing employee wages or hours by 20 percent as just cause for resignation. That being said, some unemployment insurance boards look at reduction from full-time to part-time status a justifiable reason for an employee to quit. Employees who quit their jobs for just cause in most states, are deemed eligible for unemployment benefits.