Wage issues when moving from part-time to full-time.
November 18, 2010 2:19 PM   Subscribe

Moving from part-time to full-time at work. Since I'll have benefits, is it fair to compare my old hourly rate to my new one? Should I accept what appears to be a cut in pay?

I'm about to graduate college and have been offered a full-time position at the company where I've been working part-time for a little over two years. I would be doing the same tasks but for 40 hours a week rather than 20. Without giving details, it is white-collar work.

I was offered a full-time salary that is about 75 cents less on an hourly basis than what I'm currently making as a part-time employee, averaged out over 2,080 hours (40 hrs week x 52 weeks)

However, I will have benefits as a full-time employee, including health insurance and paid vacation.

In light of that, is it reasonable to compare my current hourly rate as a part-time employee to my new effective hourly rate as a full-time employee? Or is that apples and oranges?

Related to that, is it reasonable to expect a slight increase in pay when moving from part-time to full-time?

I'm unable to provide many specifics, but I'm hoping for some more general answers.
posted by anonymous to Work & Money (19 answers total)
You cannot compare the two. Companies count your total compensation as what they are paying you and they factor in all the benefits. If you are only losing 75 cents and hour count yourself lucky!

It would be exstremely unusual to get a pay raise going from pay with no benefits to pay with benefits.
posted by shaarog at 2:34 PM on November 18, 2010

Instead of comparing it to what you had before, I'd compare it to similar jobs located in your area. That should give you a good idea of if this change in pay is reasonable.
posted by Tooty McTootsalot at 2:40 PM on November 18, 2010 [5 favorites]

As a point of reference, I believe the cost of my benefits to the university that employs me is about 27% of my salary, so the university spends 1.27 times my salary to employ me. It wouldn't surprise me if this is on the low side of benefit costs (it's a huge public university system and so gets very good rates on insurance, etc.)
posted by pombe at 2:43 PM on November 18, 2010

The difference in PT and FT pay isn't a surprise - as a part-timer, you can be fired at any time, aren't eligible for unemployment, corporate benefits, or anything else of the sort. The increased hourly salary is a reflection of that.

Furthermore, were you W2 or 1099 as a parttimer? As a W2, the company also has to pay increased taxes (payroll) on your salary, in addition to unemployment insurance and any benefits that you now qualify for.

It's standard operating procedure.

If you're not happy, follow Tooty McTootsalot's advice, and look elsewhere. If you can get a better-paying job from another company, than use that as negotiating leverage. But you won't get any leverage in negotiating your new position by using your PT salary.
posted by swngnmonk at 2:44 PM on November 18, 2010

for me, that would depend: is your company paying in full for your benefits (health, dental, etc) or will they be taking a portion of your check to cover your part of them (for instance, my cost for the benefits i've chosen at my company is ~$75 a paycheck). if you are paying for part of your benefits, i can see where you might be wary of the paycut. at the same time, more hours should let you cover that easily.

i would not have expected a pay raise just for getting more hours for the same tasks. you might try negotiating to see if there is any wiggle room to make up for the 75ยข difference, but since you are working more hours it may even itself out.
posted by koroshiya at 2:50 PM on November 18, 2010 [2 favorites]

If I'm understanding your math correctly, your full-time yearly salary is $1560 less than your extrapolated yearly total at your contract rate. If that's the case, then you're getting a deal---it likely costs your employer much more than that per year to provide insurance for you (along with all the other costs that come along with having a full-time employee). It's also almost certainly much, much less than you'd spend per year on private health insurance (assuming you're in the U.S., which it appears you are).
posted by aparrish at 2:50 PM on November 18, 2010

In Australia the customary difference in pay between casual and part/full time awards is pro-rata for the recreation and sick leave casual workers aren't entitled to. If a full time worker gets five weeks' sick and rec leave in total, for instance, a casual worker would expect to get that made up in pay—so somewhere above a ten percent loading. Employer-paid medical insurance doesn't apply here, so I don't know how you'd do that arithmetic.

You should, though, expect your pay to drop when you go to full time work.
posted by Fiasco da Gama at 2:51 PM on November 18, 2010

Do you get paid time off as a part-timer? If not, that alone makes up for a $.75 decrease in hourly pay. My benefits are also around 27% of my salary, so keep in mind it does cost them more to employ you full time then it does to employ you part time.

As with any job offer, though, you are welcome to negotiate your salary. Do it based on what other similar jobs in your area currently pay, though, rather than comparing the part time to full time pay you'd personally be getting.
posted by peanut_mcgillicuty at 3:01 PM on November 18, 2010

However, I will have benefits as a full-time employee, including health insurance and paid vacation.

Ask them to provide you with information about health insurance premiums. Very few employers pay all of the health insurance costs, and it will help give you an idea of what will be coming out of your pocket and theirs for this benefit.
posted by pwnguin at 3:20 PM on November 18, 2010 [1 favorite]

That's what, ~$140mo for benefits? Sounds about right, maybe a little high. But you do get the peace of mind that comes with a 9-5.
posted by rhizome at 3:45 PM on November 18, 2010

If you want to do a financial comparison, it's not *exactly* apples and oranges, but you have to factor in the value or cost of your benefits, which is very probably much more than 75 cents an hour. If you really want to do the math, you should look up your benefits in more detail and figure out the extrapolated dollars.

That said, I agree with Tooty McTootsalot that the best comparison is what you're being offered here vs. what you can reasonably expect to make somewhere else.
posted by J. Wilson at 3:48 PM on November 18, 2010

While it may be normal to take a pay cut when switching to a job with benefits, it's also normal to receive a pay increase when changing from a student to a person with a college degree.
posted by MexicanYenta at 3:55 PM on November 18, 2010

You shouldn't be using 2080 as the denominator, because you now have paid time off and thus won't actually be working 2080 hours a year. Subtract the paid time off you will get from the yearly hours.

To the numerator, add in how much you value the employer-paid portion of your health insurance benefits. (Not how much they paid, but how much you estimate it's worth to you in terms of savings.)
posted by Jacqueline at 4:34 PM on November 18, 2010 [1 favorite]

You can always negotiate the terms of your new employment. "I'd like to continue making the same wage that I've been making" seems like a reasonable request to make. However, if you just take the 75 cents less per hour, you're still getting a good deal if the health benefits are anything at all. Just my 2 cents.
posted by klausman at 5:44 PM on November 18, 2010

klausman has it right. "In business as in life, you don't get what you deserve -- you get what you negotiate for yourself."
posted by Shotgun Shakespeare at 7:05 PM on November 18, 2010

Yeah, negotiate. I've seen people get per hour raises even going from working as a contractor to working as an employer. (ie, not only did the company pick up benefits but also the payroll tax.)
posted by salvia at 7:43 PM on November 18, 2010 [1 favorite]

It's true that you will be compensated in other ways as a full-timer: paid vacation, benefits, you probably get severance pay if you get laid off, etc. Being able to call in sick and still get paid is something I always found exceptionally nice.

However, it's also true that if they're moving you from PT to FT, that means they like you and think you do a good job. So you probably have some leverage to negotiate a better deal.
posted by drjimmy11 at 8:31 PM on November 18, 2010

Your benefits account for around 30% of employer costs for you (the other 70% being your salary), according to Employee Benefit Research Institute Databook (Chapter 3 (PDF), page 4)
posted by blind.wombat at 8:59 PM on November 18, 2010

I recently went from PT to FT at my company, and my rate stayed the same. Our benefits cost the company 34% which is probably higher than average, but we have very good healthcare and more generous paid time off than many others.

But it would certainly not hurt to try to negotiate a better deal especially if your responsibilities are going to be seriously ramped up. The worst they can say is no.
posted by maxg94 at 4:40 AM on November 19, 2010

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