Part time workers have the right not to be treated less favourably than a comparable full time worker, and this applies not only to pay, but also to any other benefits you offer full time employees.
But it’s not always obvious how you can achieve this. Obviously holiday entitlement can be pro rated, as can pension contributions, but many employers offer benefits which can’t easily be divided up based on how many hours someone works. Perhaps you offer health insurance, gym membership or company cars, none of which can easily be divided.
The best way to deal with this situation will depend on the benefit and on the options available to you. Sometimes offering a cash equivalent to the pro rata benefit might be simplest, but offering the full benefit or not offering it at all might be appropriate.
With a company car, you could convert it to a car allowance and pay part timers the appropriate pro rata value. This would be strictly fair on a pro rata basis, but if you are providing the car as an essential tool of the job, this might meet with resistance as you are essentially forcing the part timer to make a significant outlay in order to do their job, which a full timer would not need to do. In these circumstances you might choose to provide a car despite the reduced hours, or, if there is a job share, consider requiring the employees to share the car.
Health care or other insurances
For things like healthcare, some employers take the view that it is simplest from an administration point of view to just offer the benefit in full to part timers anyway. Others give part timers the opportunity to pay the difference between their pro rata entitlement and the full time cost of the health insurance being provided, or make a cash payment to the appropriate value to the part time employee.
These are clearly not divisible, and again you will be looking at either a cash equivalent, paying the whole benefit anyway or allowing the employee to make up the difference.
Offering all employees, full time and part time, a certain value to ‘spend’ on benefits which they can choose from might be difficult to administer, but does get round this problem well, as the part timer can choose benefits which he or she would prefer and which he or she can ‘afford’ with their pro rata benefits ‘allowance’. For all employees, tailoring their benefits to suit their individual needs and preferences can be enormously popular.
If you do not have any plans for flexible benefits arrangements, you should consider each benefit you offer individually in terms of how this can be offered to part timers, including the administrative/cost burden to the business in either offering it or pro rating it, in order to come up with the best solution. One factor to consider is what the objective is in offering the benefit in the first place. If the objective cannot be achieved by attempting to pro rata the benefit, then offering it in full may be sensible.
In some circumstances, ‘balancing out’ the negative impact of not offering a benefit by offering more favourable terms else on another benefit may be possible, but you’d have to be very sure there was no argument that part timers were being treated less favourably, and overall it is better if possible to ensure part timers are treated fairly in respect of each individual term of their contract.
If it will be too costly to provide a benefit to part time employees, and there are no realistic options for pro rating it, it may be possible to objectively justify not offering it at all. However for the sake of good employee relations, clearly finding a solution which ensures part timers are not disadvantaged (whether this would be technically lawful or not) is a sensible approach.
If you’d like further advice on how to pro rata specific benefits for part-time workers, do get in touch.