Is there a reason that no one offers benefits for part-time employees?

Question

I might be making an assumption based on my own limited experience, but I'm trying to figure out why part-time work seems to be actively discouraged in the workplace.

I've been thinking about switching from my current full-time programming job because I apparently hate being constrained to a traditional 40-hour week (M-F 8-5), and I don't need as much money as I'm making.

I'm not sure yet if I would rather stay in my current position or find another, but I've already been warned of a huge drawback to switching to part-time: I would lose all of my benefits. I wouldn't have the option to use my employer's health or life insurance, or to keep paying into retirement, and I wouldn't accrue vacation or sick days. I get sick a lot, ride motorcycles, and fly planes, so this is a serious issue to me.

In trying to find a different job, it seems as though it's basically impossible to find part-time work that offers any benefits, hence my question, is there any reason that employers don't offer benefits to part-time employees? Is it just some 50's-era corporate mentality that says "if you're not working X hours, you're not being productive"? What's the difference to the company if I'm working 40 hours or 30?

Answer 1

Because it costs them more

Your benefits are a FIXED COST. The less hours you work, the more expensive you become.

Let's use healthcare as an example.

Let's say your company contributes $15,000 per year for your healthcare.

Let's say you work full time for $30,000 per year.

Your total cost is $45,000 for 2000 hours of work or $22.50 per hour.

Now you go part-time.

Your total cost is now $30,000 for 1000 hours of work, or $30.00 per hour.

You just increased your hourly cost to the company.

Why would they do that?

There are far more fixed costs than just benefits. Consider desks - why hold a single desk for a p/t person? Most business units have to pay some type of rent per square foot. Now, your desk just cost me double, because I'm not able to use it when you are not there. Other similar things - cost of equipment, tools, uniforms, etc - all are now essentially doubled compared a f/t person. Etc. Consider soft costs - scheduling of meetings around p/t person, ensuring uniform communication, teamwork is harder with p/t person. Etc

Answer 2

I apparently hate working 40-hour weeks, and I don't need as much money as I'm making.

I'm not sure yet if I would rather stay in my current position or find another, but I've already been warned of a huge drawback to switching to part-time: I would lose all of my benefits. I wouldn't have the option to use my employer's health or life insurance, or to keep paying into retirement, and I wouldn't accrue vacation or sick days.

All of these things equate to money, and they can all be purchased outside of an employer.

Life insurance, health insurance, Retirement accounts, time off (obviously), etc. can all be purchased. You don't need to depend on your employer for any of these.

You already indicated that you "don't need as much money" as you are currently making. For the next step, simply factor in the cost for the "benefits" you wish to purchase in your decision regarding how many hours you wish to work and compare that to the hate you have for 40.

There's nothing special about "benefits". If you want to be able to purchase more of anything, you must earn more. If you are willing to purchase less, you can earn less (and presumably work less).

is there any reason that employers don't offer benefits to part-time employees?

I know that is as much a rant as it is an actionable question, but I'll try to answer anyway.

There's no real "reason" other than lack of laws, lack of unions, and lack of competitive practice.

It's incorrect to say that "no one offers benefits for part-time employees". A few employers do offer some (usually reduced) benefits to part-time workers. And a few locales do require that some "benefits" be extended to some part-time workers.

Consider specifically seeking employers who provide a range of benefits for part-time workers. A quick Google search will find them. For example: http://www.businessnewsdaily.com/5752-part-time-jobs-with-benefits.html

Also consider that some companies still consider less than 40 hours to be "full-time". I know some companies that require only 32 hours to be considered full-time.

Benefits change with the economy, with the locale, with the domain, and with the times. In the not too distant past, many employers offered pensions. Now, outside of the public sector and academia, few do. On the other hand, employers might be getting more creative with their benefits these days - pet insurance, eye care, group legal, group purchasing power, etc. are being offered by more employers. Some are even offering education assistance and English language lessons.

It's all in the name of attracting and retaining a desirable workforce. When an industry must compete harder for a smaller pool of workers, they may choose to offer more benefits and/or better pay. If the desired workforce is plentiful, or the competition is offering less, than an employer may offer less as well.

If you are looking for full-time benefits in a part-time job, I suspect you'll have a hard time finding that. Maybe this will change in the "gig economy", maybe not.

What's the difference to the company if I'm working 40 hours or 30?

About 25% of your work output, apparently.

Answer 3

I'm surprised no one has mentioned it, but the question you should ask is: Why do any employers offer health insurance, retirement packages, etc.? Why not just offer bigger salaries?

(What does health insurance really have to do with paying someone to answer the phone, or to fix clogged pipes, or to program computers?)

Googling "history of employer provided health insurance" will give MANY resources. I'll let you choose your favorite source.

---

In essence, there were wage controls imposed by the government during World War II and employers could not offer whatever wages they wanted. So, unable to compete for the best workers by offering higher salaries, they started saying, "Okay, we'll pay you the maximum wage we legally can, and we'll pay for your health insurance also."

This became so "normal" (through labor unions, vested interests, lobbying, etc., etc.) that in most cases it's now illegal for employers not to provide health insurance coverage for full-time employees.

While on the other hand, in most cases, there are no such rules regarding coverage for part-time employees.

---

Personally, I would rather just get paid more than receive such benefits. The cost of mandatory health insurance for ALL full time employees is that the actual wages themselves are not as high as they could otherwise be.

(If you ever have the opportunity to do cost analysis on a business's finance lines, you will be startled how much more money is spent per employee beyond the amount of the actual paycheck itself.)

---

As noted in the current top answer, given money, you can purchase whatever health care suits your preferences and aren't limited by what the "company plan" includes. Or you can choose not to purchase insurance at all and to invest the money instead. Or go on a cruise. Or anything else you want. It's your money, so you can choose.

Answer 4

Just to add a different (non-US) perspective:

In Germany, working part-time is quite normal (though not every company supports it to the same degree). In particular, I know several software developers who work part time (between 20 and 30 hours, when the regular work week is 40h).

Benefits are usually not a problem:

• health insurance and retirement insurance for (most) employees are compulsory in Germany, and premiums are a percentage of your income, so the cost changes with your salary
• the number of vacation days is simply reduced proportionally (or stays the same if you work fewer hours per day, instead of fewer days)

It's true that a part-time employee will be present for fewer hours, which can cause problems with meetings and customer service, but in my opinion that is mostly a question of good organization. There is also a benefit: A part-time employee will often be able to ramp up to full time for a short while in an emergency, so part-timers can be an "emergency reserve" if there are problems. This is better than making full-time staff work (even more) overtime, because productivity drops once you go beyond 50h or so.

So to answer your question: There are part-time jobs with benefits, at least outside the USA :-).

Answer 5

Part-time is discouraged in all but customer service industries because most companies find it difficult/risky to manage.

If I have a part-time software developer, are his hours going to coincide with when I need him available to work on a particular issue? What about when I need production support, do I have to wait until the next day when he comes in? How do I work out the hours when there is a need to work overtime? Will the person be willing to work overtime during the final days before a major launch, etc.

If I have a need for someone to work full time as an accountant, then I have to recruit two part-timers instead of one full time person which is harder. Then I have the problem of information sharing so that the guy who works afternoons can pick up where the woman who works mornings leaves off. If I can't divide the work so that no person needs to be aware of exactly how far the other person got that day, then it becomes much more a of a risk.

Further, in this situation, it is often likely one person will carry the other person so that one does the majority of the work. This causes resentment and it makes it hard for managers to often even know who is doing more to reward that person since they are sharing tasks.

There is also an element of if I let one person do it, then everyone will ask which make for a problem if you have some jobs that are more difficult to split up than others.

A psychological problem with co-workers shows up if the part time person ends up doing as much as the full-time people. Then they look as if they are slacking which leads to peer pressure. Sometimes the part-time person does this in order to make sure he or she will be allowed to continue to work part time. Also it is easier to concentrate longer when working a 4 hour day than an 8 hour day.

So you see there are many challenges from the corporate level concerning managing part-time work and very few benefits. So one way they discourage it is by making sure the benefits are poor or non-existent.

Answer 6

I have seen some companies that provided partial benefits for less than full time. For some benefits that is easy to do: work half the hours get 1/2 the vacation days. For others it is more complex.

For health insurance I have run into companies that have set the health insurance as a $ limit. For a full time employee with a single policy they cover $500 per month for premiums. For a family it is $1000. If you work less than full time they scale it. If the family policy is $1500 a month, then a full time worker will see a deduction of $1500-$1000 or $500 from their monthly pay. A person working 30 hours a week would see a deduction of $1500-$750 or $750 from their monthly pay. Note this was pre-ACA so the rules may have changed.

I have also run into some companies that gave you extra days if you didn't need all the benefits.

Answer 7

If your employer doesn't offer any benefits to part-time workers, I don't see why you can't renegotiate your hourly rate when you switch to part time*. When you get hired, HR usually love to explain how much money you will actually make if you count all the benefits in. Just redo the same mental exercise again to find a salary estimate for a full-time employee without any benefits, then scale that number by the percentage of time you're willing to work.

(*) unless there's a law which gives you the opportunity to go back to the full-time while keeping your part-time hourly rate and getting all the benefits back, in which case the answer is "because your country has poor legislation regarding part-time workers".

Answer 8

I think the answer is actually backward from what you're thinking. Since the Affordable Care Act law requires that companies give benefits for full-time workers, many [retail, food service] companies stopped offering full-time jobs in order to keep from having that huge overhead. It was estimated that up to a million people in those industries were pushed to part-time. In other words, part-time (under 30 hours) is now the way to keep from having to pay for benefits. Your case is obviously different since they already have you on-hand and with benefits, but perhaps they don't want to cross that threshold of giving benefits to someone part-time (for the reasons explained in posts above).

https://my.vanderbilt.edu/carolynheinrich/files/2016/06/DHH_Effects-ACA-on-Part-time-employment-6-9-16.pdf

EDIT: Part-time employees rarely received benefits even before the ACA took effect in 2010 and there's nothing in the ACA that prevents an employer from switching someone to part-time.

2005: www.referenceforbusiness.com/small/Op-Qu/Part-Time-Employees.html 2006: allbusiness.com/should-part-timers-get-benefits-431-1.html 2008: twc.state.tx.us/news/efte/part_time_full_time.html