March 18, 2015

cutting hours and pay As a small business employer, budget constraints, scheduling demands, and other considerations may occasionally prompt you to reduce the hours of some or all of your employees. This may even involve reclassifying one or more Full-Time (FT) employees as Part-Time (PT). Be careful, though! Cutting employee hours and/or reclassifying any employee should only occur for legitimate business reasons.

If you are making across-the-board cuts for budgetary or staffing reasons, you may be perfectly justified. On the other hand, there are other circumstances which require more caution, and you never want to look as if you are cutting hours as a form of discrimination or retaliation.

Can You Cut the Hours of a Problem Employee?

You can imagine the situation in which this question becomes relevant. One of your employees is a pain to deal with – whether they’re underperforming, negatively affecting the office mood, or exhibiting behavioral problems – and your whole team simply functions better when this person isn’t around. Can you cut their hours as a disciplinary measure . . . or in the hope that maybe they’ll quit so you don’t have to terminate? Or can you simply schedule this person less, for the benefit of the practice?

No!

This action leaves you wide open for a retaliation claim. Cutting the hours of a problem employee should NEVER be used as discipline or in an attempt to make an employee quit. It’s simply too dangerous: you’ve just laid perfect groundwork for a possible retaliation or discrimination claim. Worse yet, you now have an employee who is likely disgruntled and still underperforming, in a prime position to sabotage your practice or build a claim against you. If an employee needs to be fired, then get your documentation of the performance problems in order, speak with an expert to make sure you’ve considered and mitigated all risk factors, and let them go. Any other action could set you up for a multitude of problems.

Cutting Hours is a High-Stakes Game for Employees and for You

Reducing hours is a high-stakes game for most employees, as they stand to lose wages, schedule preferences, and, if they are changed from FT to PT status, even valuable benefits such as vacation time, sick leave, and health insurance. And as the employer, there’s a lot at stake for you, too: employee morale and job performance, retention of good employees, and claims or lawsuits that could be brought against you by problem ones.

Use extra caution if you’re tempted to cut the hours of or reclassify any of the following:

  • A good employee that you don’t want to lose. As mentioned before, FT employees may stand to lose valuable benefits if their hours are reduced too far, and may decide to seek work elsewhere. If a good employee decides to leave, your practice may feel the loss keenly, and you’re left with the expense of rehiring.
  • An employee that you wish would quit. As we discussed before, cutting the hours of this type of employee is NEVER your best option, and is NOT a substitute for coaching, documentation, and letting them go when you need to.
  • An employee who has consistently not been working their scheduled hours. You may eventually need to reclassify, but use coaching first and determine the reason (is a valid accommodation needed, or is the employee simply not working as scheduled?). Make sure such an employee is aware that his/her failure to work their schedule over a long-term period will eventually result in reclassification (and potentially disciplinary measures). Bring the possibility of reclassification up gently, not as a threat that their benefits are about to be snatched away. Set expectations and document the interaction.
  • A pregnant or disabled employee. Reclassification or reducing hours is even more complicated when there are extra risk factors involved, such as pregnancy, medical issues, or disability. Please call CEDR or your favorite HR expert to discuss.

Now that we’ve discussed when you should not reclassify, when is it advisable or necessary?

When You Can Cut Employee Hours or Reclassify

As a rule, cutting hours and reclassifying employees should be as infrequent as possible, done for valid business reasons, and handled with care. Reasons involving business budgets, changes to your hours of operation, or across-the-board schedule changes may be perfectly valid. Likewise for an employee who consistently works less (or more) than their scheduled hours, if you have already coached them that a change to their classification is imminent.

Have a question about this topic? ESS members may call the CEDR HR Solution Center advisors anytime at 866-414-6056 or email info@cedrsolutions.com. We’ll help you resolve one issue for free!

This ESS is the first in a two-part series on Cutting Hours and Employee Reclassification. To find out more about valid business reasons for FT/PT reclassification and how to successfully accomplish this process, click HERE for Part 2.

Friendly Disclaimer: Tips presented here are general in nature, and are not intended to replace good counsel about a specific issue with either your attorney or your favorite HR expert.

Friendly Disclaimer: This information is general in nature and is not intended to provide legal advice or replace individual guidance about a specific issue with an attorney or HR expert. The information on this page is general human resources guidance that is believed to be current as of the date of publication. Note that CEDR is not a law firm, and as the law is always changing, you should consult with a qualified attorney or HR expert who is familiar with all of the facts of your situation before making a decision about any human resources or employment law matter.