Advancing the rights of working families.

What is the Part-Time Penalty?

The Way it Is

Part-time work is essential, not peripheral, to our economy. One in six American workers is employed part-time and a growing number of whole industries, including retail and janitorial services, are becoming part-time.
According to the New America Foundation, 25 percent of employed women work part-time compared to 11 percent of employed men. Also, women are more likely to work part-time for reasons related to work-life balance, compared to 45 percent for men. According to the National Employment Law Project (NELP), 7 million women, and 1.8 million men, spend part of their peak earning years working part time.
Although part-time workers report significantly less work-family conflict, part-time work comes with a steep price tag: part-time workers earn on average 20% less per hour than other workers with the same level of education and experience. They also receive far fewer benefits. According to the Economic Policy Institute (EPI), only 17% of part-time workers receive employer provided health care coverage in contrast to 69% of full-time workers. Only 20% of part-time workers receive an employer provided pension plan compared to 2/3 of full-time workers.
As the recession deepens, more employers are pushing workers into part-time jobs to save money. As of March 2009, 7.8 million workers were employed part-time, even though they would like a full-time job.

These workers are now experiencing what millions of part-time workers, particularly women with family care responsibilities, know well: outdated laws and policies penalize part-time workers. Various statutes designed to protect workers either explicitly exclude part-time workers or implicitly allow employers to discriminate against them.
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Unemployment Insurance (UI). Many states exclude part-time workers from unemployment insurance by requiring them to be looking for full-time work in order to receive UI benefits. These part-time workers are excluded from UI even though their wages are subject to UI payroll taxes and their earnings prior to layoff meet state eligibility rules. A growing number of states are now working to eliminate the distinction between full-time and part-time and have adopted policies that provide UI benefits to unemployed part-time workers in their state.
Family and Medical Leave Act (FMLA). The FMLA guarantees workers 12 weeks unpaid leave to care for a newborn or adopted child, a seriously ill family member or to recover from illness or injury themselves. However, it only applies when an employee has worked for a company at least 12 months and for more than 1,250 hours in the preceding 12 months. As a result of these restrictions, many part-time and low-income workers fail to qualify.
ERISA & U.S. Internal Revenue Code (IRC). ERISA allow employers to exclude from pension plans those workers who work fewer than 1,000 hours annually. The tax code allows employers to exclude persons who work less than 35 hours a week from health insurance. Also, both ERISA and the U.S. Internal Revenue Code preclude employees from partially retiring and receiving a portion of their pension benefits to supplement their reduced income. In order to receive a distribution from a defined benefit, workers must have fully severed employment or reached the age of 62.
Title VII of the Civil Rights Act of 1964 (Title VII). Although Title VII affords equal rights to employees in the workplace, it does not explicitly require equal treatment for part-time workers. In contrast, the EU’s Directive on Part-time Work prohibits employers from treating part-time workers less favorably than “comparable full-time workers” in terms of pay, benefits, training and promotional opportunities and bargaining rights unless they demonstrate that the distinction is objectively justifiable.

The Way It Should Be

As more and more workers are taking part-time jobs in this worsening economy, it’s critical we ensure that they are treated equitably in law and policy. Part-time workers should be afforded pro-rata pay and benefits. An hour of part-time work should count the same as an hour of full-time work. .
Quality part time work should be recognized as essential to our economy and beneficial for many constituencies, including workers who care for children and the elderly, seniors who wish to work part-time after retirement but are limited by health concerns, as well as individuals with disabilities who are unable to work full-time.
Part-time work should be recognized as good for business and the bottom-line. Research shows that part-time employees can save employers money in terms of recruitment, retention and reduced office space costs.
Quality part-time work should be recognized as essential to family economic security. Workers should not be forced to make the impossible choice between caring for their loved ones and keeping the jobs they need to make ends meet.

What We’re Doing About It

A Better Balance is working to change law and policy to guarantee fair treatment of part-time workers, including proportional wages and benefits compared with full-time workers. For example, we’ve drafted paid sick days laws around the country which allow workers to accrue time towards paid sick days based on the number of hours they work, not whether they are full or part-time.
We’re pushing for passage of a bill in NYC to ban family responsibility discrimination which would help protect part-time workers with caregiving responsibilities from unfair treatment on the job.
We’re advancing litigation strategies to advance the rights of part-time workers under Title VII and the EPA.
We’re advocating for innovative state and local policies such as tax breaks that would encourage employers to offer full benefits to part-time employees.

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