Part Time Employment Versus Full Time Employment

Part Time Employment versus Full Time Employment

Elizabeth Colley

MBA 658:  Managerial Economics

Belhaven University

Part Time Employment versus Full Time Employment

Introduction

        Every year, retail stores begin hiring workers to prepare for the holiday shopping season.  Usually, part time positions are advertised so that stores can meet the demands of the public without having to offer additional benefits to the employee.  However; since the passage of the Patient Protection and Affordable Care Act (PPACA), there has been concern that companies would decide to only hire part time workers so that companies can keep their health care costs down and still be in compliance with the law.  This paper will examine the difference between full time and part time employment, the cost benefits of companies that hire part time workers rather than full time workers, how the PPACA has impacted hiring decisions of businesses, how ethical the decision to hire part time workers over fulltime workers is, and what the Bible has to say regarding hiring practices.  

 Difference between Full Time and Part Time Employment

        Under the Fair Labor Standards Act (FLSA) there is no set definition of how many hours constitutes full time employment or part time employment (Work Hours, n.d.).  In an article by Adrienne Fox (2010) while there was no set number of hours that constituted full time status, “it used to be that full-time work meant working 40 hours a week with benefits and part time meant working fewer than 40 hours a week with no benefits.”  However; under a provision of the PPACA, full time employment is defined as “a person who works on average 30 hours weekly” (Williams, 2015).  Employees who work an average of less than 30 hours a week would be considered part time employees. Members of Congress have tried to pass legislation that would define full time status as a 40 hour work week; however, The Forty Hours Is Full Time Act has failed to pass in the Senate (Williams, 2015).           

Cost Benefits

        When retailers begin to hire part time employees for the upcoming holiday season, they see this as a chance to meet the demand of the consumers while not having to pay out additional benefits.  Retailers such as Wal-Mart and Target offer positions on a seasonal basis so that once the holidays are over they can scale back their payroll costs.  One benefit to hiring part time workers is that “part-time or temporary employees are typically paid a lower wage than full-time or permanent employees; often these part-time employees are paid the federal minimum wage” (Bartkowiak, 1993).  Another benefit that Julia Bartkowiak (1993) talks about in her article for the Journal of Business Ethics is that employers that hire part time workers do not have to pay for medical benefits for temporary and part time workers.  This allows employers to have lower overhead costs which can increase the profitability of the business.  It also allows employers to be flexible with their workforce so that their payroll stays in line with the demand for their goods and services.  It allows for more people to be hired which offers greater flexibility.  Peter Cappelli and J. Keller (2013) did a study that looked at alternative hiring arrangements.  They define alternative hiring arrangements as employees that are hired as temporary, contract, and/or part time workers.  Through their research, they were able to determine that alternative hiring arrangements gave employers “greater ‘numerical’ flexibility, which is the ability to adjust the number of workers being used” (Cappelli & Keller, 2013).     The choice to hire part time employees over full time employees has also grown to include all major industries in the workforce.