Human Resource Blog

Differential Pay - Part-Time Employees

Currently it is our policy to pay shift differential pay to our 2nd and 3rd shift non-exempt full-time employees. We are thinking of hiring some part-time warehouse employees for the 2nd shift. Do we have to pay them shift differential pay also?

We are in the State of Minnesota, and in our employee handbook it states that shift differential pay is for all non-exempt full-time employees who are required to work 2nd or 3rd shift scheduled hours.

Also, in the new hire letter given to the part-time employees, shift differential pay is not included.

Many employers are rethinking compensation packages in the wake of the federal Ledbetter Act. That law, passed in early 2009, permits an employee to sue for pay discrimination even 20 years later. Ledbetter requires that compensation decisions be based on objective criteria. Full-time or part-time could be considered objective criteria, as long as you have a specific number of hours defined as part-time (for example, 24 hours per week or 32 hours per week) and the part-time employees never work more hours.

You would be justified in not paying a shift differential to part-time employees, as long as this policy was permanent and consistently applied to every part-time employee.

Unfortunately, in the past some employers have used part-time status to illegally discriminate in pay. If you take this tactic, you must be very careful to avoid the appearance of discrimination.

Be aware that if there is ever a time when the part-time employees are mostly female, while the full-time employees are mostly male, (or vice versa) this would be illegal pay discrimination based on sex. By the same token, if most of the African American employees or Asian employees or Hispanic employees, etc. are part-time (at any point) this would be illegal pay discrimination. All of these are de facto discrimination under federal and state laws, meaning that illegal pay discrimination exists even if that was never your intention.

The safest and simplest method would be to pay all employees on 2nd and 3rd shift the shift differential. Another option would be to not pay any workers shift differential, whether they are full time or part time. If you take any other measure, you may get away with it, but you will have to live with the threat of a lawsuit for the next 20 years or more.