One of the key decisions an employer needs to make regarding the members of a workforce is whether those employees will serve in full-time or part-time capacities. In most cases, employers are free to change workers from full-time to part-time schedules. However, doing so can have unintended consequences unless employers approach the decision carefully.
The federal government, which controls basic labor laws such as those dealing with workplace safety and minimum wage requirements, does not recognize a distinction between full-time and part-time labor. This means that each employer's use of these terms is based on internal guidelines or commonly accepted definitions, such as an arbitrary 30- or 40-hour weekly cutoff. For example, a worker's schedule that qualifies as full-time for one employer may fall into the part-time category at another business. However, all workers enjoy the same legal rights regardless of the number of hours they work.
Employers can usually change employees from full time to part time by giving notice or simply altering the employees' schedules to reduce their hours. Employers may do this to save money on payroll when revenue is low or there is less of a need for labor due to slow growth or a seasonal drop in demand. Employers can also change employees' status to eliminate benefits that they only provide for full-time employees, a move which can provide the employer with substantial savings due to the high cost of employer contributions to health insurance and retirement savings plans.
In some cases, an employer may not legally reduce a worker's weekly hours or employment status. This occurs when the employee has a formal or implied contract that defines her work hours, status or benefits that the change in employment would affect. Employers that don't require formal contracts must know whether implied contracts, such as employee handbooks, job recruitment brochures and recruiting advertisements, include information about work hours or benefits. For example, if a business has an employee handbook that defines full-time employment as anything over 40 hours per week and also identifies a job title as a full-time position, the employer can't reduce a worker's hours in that job title without violating this implied contract.
Changing an employee from full time to part time can have several consequences for a business, not all of them positive. Employees who lose their benefits may leave to pursue employment elsewhere, leaving the business with a position to fill as well as the cost of recruitment and training. Employees who were exempt from overtime laws under federal guidelines can become eligible once they start working part-time hours, which will cut into the payroll savings that such a move would achieve for the business. Finally, cutting back on hours at work can harm morale if other workers see it as a sign of the company's poor overall performance or a lack of attention to workers' needs and management's detached focus on the bottom line instead.