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Shifting to Part-Time - Advice on Structure
Old 10-26-2021, 09:35 AM   #1
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Shifting to Part-Time - Advice on Structure

So, I took a deep breath and told my Megacorp boss that I want to downshift into a part-time position, basically spending the next few years running some low-stress projects and working with the company to shift some of my higher-profile projects to other places. My boss was surprisingly cool with it, though I imagine they were chewing through their cheeks at the same time.

There will be an initial meeting soon to discuss further. I'm 55, widowed, exempt/salaried, and covered by a (frozen) pension along with a couple of cash balance programs that replaced the pension (which can start at anytime but 65 is full payment). My 401k does have a Rule of 55 provision, though it's an all-or-nothing withdrawal setup. (I have brokerage, Roth, and a spousal inherited IRA that can get me to 59.5 and beyond if I can't touch my 401k until 59.5)

Having never had to negotiate, well, anything, with an employer, is there anything I should be watching out for? My initial salvo mentioned that I want to be able to work from anywhere (so, fully remote unless I choose to go in), and that I'd like to still be covered by the Megacorp health plan. Salary is far less of a concern, unless they won't keep me in the health plan, in which case I want more money so I can go ACA.

If they say they will only agree to a new role if they move me to contractor status, I wouldn't necessarily have a problem with that unless there's potential landmines I am aware of. (COBRA? Rule of 55? etc)

Basically, I'd love any insights into how to best position myself in this. I'm not so desperate to keep working for them that I'd just go along with anything, but I am ready to leave if they don't come up with anything to my liking.

Thanks for any tidbits that you big-time corporate warriors can provide.

Also, I can't believe I actually did it.
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Old 10-26-2021, 10:08 AM   #2
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Congratulations. First thing is to go slow and listen carefully when they make suggestions or offers. Never agree on the spot or do any serious negotiation in an initial meeting. Take your time, go home, think about it, maybe even invent an absent authority like "My CPA and attorney have told me to check with them before making any commitments." It is when things happen quickly that mistakes are made, especially by amateur negotiators.

Almost certainly this is not the HR department's first rodeo. They have seen this situation in the past and have a fairly standardized structure that they will propose. They are not likely to be tremendously flexible; it would be a nightmare to administer a different deal for every ex-employee going part time. This is another reason to go slow and explore for areas of flexibility.

The question of contractor vs standard W-2 employee is not just a matter of taste. There are extensive rules and there is a lot of case law. Most of the risk is theirs, though. If the IRS decides they are miscategorizing employees as contractors the penalties can be big. Your main issue will be what happens to your tax and retirement savings situations. Working with a CPA is probably a good idea regardless, but if the company plans to make you a contractor it is probably imperative. They will not be interested in your helping them with this decision, but you should be able to negotiate dollars so you don't lose.

General negotiation tips: He who is in a hurry loses. It's important too that you are willing to bail. If you're not willing to leave the table you aren't negotiating, you are begging. Finally, remember that silence is a powerful tool. Instead of responding quickly to ideas, just sit there and look like you're thinking. This make people nervous. I have had it happen that I got a proposal and while I was sitting quietly, got "Well if you don't like that, what about this?" -- which was the backup position.

Yes, I think negotiating is fun. But I understand that most people don't. Good luck.
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Old 10-26-2021, 10:26 AM   #3
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Thanks for any tidbits that you big-time corporate warriors can provide.

Also, I can't believe I actually did it.
Congrats! A big step and, hopefully, just the first one in your journey towards full FIRE.

I did the same thing, downshifting to part-time, when I was ready to transition out of my long-time job with MicroCorp. In my case, there wasn't much negotiation, since they desperately needed to retain my skills and experience for at least a couple more years. So I basically got exactly what I asked for: same base salary, but no bonuses or other performance-based comp; full health insurance coverage; work from home (or anywhere) as much as needed or wanted, but come into office one day/week. Looking back, it was an almost ideal scenario for easing me into the ER lifestyle.

I don't really have any specific advice for you or your particular situation. Just be prepared for lots of awkward questions/comments from coworkers: "How can you afford to only work part time?", "What do you do with all that free time?", "Must be nice to have that kind of money/freedom/flexibility/etc."
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Old 10-26-2021, 10:28 AM   #4
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Finally, remember that silence is a powerful tool. Instead of responding quickly to ideas, just sit there and look like you're thinking. This make people nervous. I have had it happen that I got a proposal and while I was sitting quietly, got "Well if you don't like that, what about this?" -- which was the backup position.
+1
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Old 10-26-2021, 10:39 AM   #5
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Congratulations. First thing is to go slow and listen carefully when they make suggestions or offers. Never agree on the spot or do any serious negotiation in an initial meeting. Take your time, go home, think about it, maybe even invent an absent authority like "My CPA and attorney have told me to check with them before making any commitments." It is when things happen quickly that mistakes are made, especially by amateur negotiators.

[..]

Yes, I think negotiating is fun. But I understand that most people don't. Good luck.
Thanks, all of your post was great. Clearly advice coming from a master! I am definitely not one to go slow normally, so I will really take this to heart.
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Old 10-26-2021, 10:42 AM   #6
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Congrats! A big step and, hopefully, just the first one in your journey towards full FIRE.

I did the same thing, downshifting to part-time, when I was ready to transition out of my long-time job with MicroCorp. In my case, there wasn't much negotiation, since they desperately needed to retain my skills and experience for at least a couple more years. So I basically got exactly what I asked for: same base salary, but no bonuses or other performance-based comp; full health insurance coverage; work from home (or anywhere) as much as needed or wanted, but come into office one day/week. Looking back, it was an almost ideal scenario for easing me into the ER lifestyle.

I don't really have any specific advice for you or your particular situation. Just be prepared for lots of awkward questions/comments from coworkers: "How can you afford to only work part time?", "What do you do with all that free time?", "Must be nice to have that kind of money/freedom/flexibility/etc."
Thank you! Your situation sounds extremely similar to mine and my desired outcome. While no one is irreplaceable, they would be up a bit of a creek if I just walked. So I think there is room for a mutually beneficial arrangement.

Since my late DH worked at the same company, I think most co-workers would probably grasp why I'm able to downshift and also maybe understand that I don't exactly want to live out my days at the same place where I walk past his old desk on a very regular basis. Plus, I've always worked at home 2x a week and so I'm not sure how much people will really notice!

Thanks again.
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Old 10-26-2021, 10:53 AM   #7
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... I am definitely not one to go slow normally, so I will really take this to heart.
If you hurry or let things go out of control and make a mistake you will probably remember it for the rest of your life. If you negotiate slowly for four weeks and get your best deal, you will not remember those four weeks for very long at all.

A good outcome is if your boss gets nervous and starts pushing HR for you.
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Old 10-26-2021, 10:56 AM   #8
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If you hurry or let things go out of control and make a mistake you will probably remember it for the rest of your life. If you negotiate slowly for four weeks and get your best deal, you will not remember those four weeks for very long at all.

A good outcome is if your boss gets nervous and starts pushing HR for you.
Thankfully my brain has already settled on this probably not being completely figured out and in place before the end of the year, and given that we are all still working from home until mid-january, I feel like if things continuous they are for a few more months, I'm not really that concerned. My BS bucket is not full.
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Old 10-26-2021, 10:57 AM   #9
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If they are going to make you a contractor that means no medical other than you fully paying cobra or ACA. is that Ok with you? Are you expected to setup new tax paperwork (yes, likely). If you want to stay on the company coverage, you'd probably need to keep 30 hours a week as that's what current law dictates is the minimum they can require.

Aside from that, decide the hours/days you want to work and make it clear you'll be firm - no spillover or what's the point? DH went part time his last year and did it 4 hours per day (i'd have gone for less days myself). He was very strict with his hours, and if a day called for an afternoon meeting he started late to accommodate it, vs. adding it on for free or some nonsense.

And you can be very clear and firm on your lines in the sand. Write it all out, know where you can wiggle and where you can't, and go in firm on those things that you can't, and keep your best compromises in your back pocket until you have to use them.

And yeah, whatever the negotiation is, however great it sounds "thanks, I'll take a few days to look this over and get back to you!" is the answer.

And have other short answers ready... "Interesting.." goes a long way. If you think something might work out poorly, don't say that, but press them... "How would that work exactly?" "Can you explain that in more detail?" - push them to expose the gaps vs. pointing them out.
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Old 10-26-2021, 11:28 AM   #10
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If they are going to make you a contractor that means no medical other than you fully paying cobra or ACA. is that Ok with you? Are you expected to setup new tax paperwork (yes, likely). If you want to stay on the company coverage, you'd probably need to keep 30 hours a week as that's what current law dictates is the minimum they can require.

Aside from that, decide the hours/days you want to work and make it clear you'll be firm - no spillover or what's the point? DH went part time his last year and did it 4 hours per day (i'd have gone for less days myself). He was very strict with his hours, and if a day called for an afternoon meeting he started late to accommodate it, vs. adding it on for free or some nonsense.

And you can be very clear and firm on your lines in the sand. Write it all out, know where you can wiggle and where you can't, and go in firm on those things that you can't, and keep your best compromises in your back pocket until you have to use them.

And yeah, whatever the negotiation is, however great it sounds "thanks, I'll take a few days to look this over and get back to you!" is the answer.

And have other short answers ready... "Interesting.." goes a long way. If you think something might work out poorly, don't say that, but press them... "How would that work exactly?" "Can you explain that in more detail?" - push them to expose the gaps vs. pointing them out.
Thanks for all of this. The "hours" thing is a perpetual conundrum. As an exempt employee (but not a manager or supervisor), and with responsibilities for projects that support a 24-hour operation, I have just always sort of been operating as "if the work needs to get done this minute, I'll do it this minute." The trade-off has always been stretches where I don't necessarily have much to do. And I think it would be hard until more of my more mission critical projects get rehomed (I write in-house workflow applications) for me to say that I will only work on them from 9 to 5 M-Th. And I actually don't really mind it. It can all be done remotely, so as long as they don't expect me to be at a desk in the building, that's a decent enough trade-off. And it's probably the number of remaining projects that will determine how much they need from me.

I think this particular organization is generally pretty flexible, especially with people they want to keep around in whatever form. But all of this may still make it more likely I become a contractor. Not really my preference, since the health insurance is pretty fabulous, but I'll just listen to what they have to say, reply with "interesting," and go from there.
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Old 10-26-2021, 11:42 AM   #11
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My initial quick thought is your company policy is what may dictate the answers to some of your questions. You have already talked with your boss, so set up time to talk to HR and learn the company policy. It may just be that you keep all the same pay and benefits, but at proportional amounts. Your co-pay for the insurance may increase if that is still available, or may be the same as long as your part time meets some minimum like 50% or greater for example. Your HR should already have some rules and knowledge that apply for your proposed part time.

I went part time to end my working career. My company kept me as a W-2 employee, I received all my benefits at proportional levels, incl vacation even. I was in a good position as they needed me more than i needed them. But there was not any negotiation as it was all determined by company policy. I received my same pay, just at 60% of total since I was working 60% (3 days/wk). The part time was great as I was able to structure it so most weeks were Tues-Thurs. Occasionally i needed to be there for a Mon, and almost never for a Fri.

Hope it all works out great for you, it is always a good position where they need you more than you need the job.


edit to add: the main reason I kept working was to maintain the health insurance. I was already living off the 60% amount, and saving 40%; so all I did was reduce the savings and kept my current lifestyle and budget once on part time. But with 4 day weekends and all the extra time to do things I wanted to.
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Old 10-26-2021, 11:49 AM   #12
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... And you can be very clear and firm on your lines in the sand. Write it all out, know where you can wiggle and where you can't, and go in firm on those things that you can't, and keep your best compromises in your back pocket until you have to use them. ...
With respect, IMO this is a bad idea. It is called "negotiating with yourself." What happens is you guess at what the person across the table might say, then formulate a response. The problem is that you don't actually know what they will say and you will probably guess wrong. Having all of this in your head also inhibits careful listening. Compound the first guess with three or four more guesses and it's virtually guaranteed that the deal will be in a different place than you predict. Also, you may have teed yourself up to make concessions that you don't have to make or to put yourself somewhere you really don't want to be. Finally, having all this pre-canned stuff in your head has a tendency to accelerate the discussion, which is exactly what you don't want.

An attorney just did this to me on a land deal. We had negotiated a couple of road easements across the seller's property. One, already accepted was 32'wide. The attorney, anticipating that the seller would object to 32' width on the second easement, VOLUNTARILY offered an easement width of only 16' -- without telling me and without asking permission. Had he not tried to predict the seller's reaction to 32' we probably would have gotten the full width just fine. I am still steamed up about this one. Grrr...
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Old 10-26-2021, 12:38 PM   #13
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Agree with the above. Itís not a negotiation, itís a desired outcome for the OP to work less hours. There will/May be an impact and your current workload needs to be shared or given in entirety to another resource.

I started PT this year and one bit of advice, again, touched on above, is identify the tasks you will give up and even suggest how they can be covered. I was dropping a day from my 4 day week and felt a bit of flexibility would be good. So I would choose the day I would have say with a weeks notice. Mistake, decide what day you wish off and stick to it. You want to protect your day off such that colleagues understand that you do not work on that day. Block days/ hours out on your calendar such that people realise you are not available.
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Old 10-26-2021, 12:44 PM   #14
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Agree with the above. Itís not a negotiation, itís a desired outcome for the OP to work less hours. There will/May be an impact and your current workload needs to be shared or given in entirety to another resource.



I started PT this year and one bit of advice, again, touched on above, is identify the tasks you will give up and even suggest how they can be covered. I was dropping a day from my 4 day week and felt a bit of flexibility would be good. So I would choose the day I would have say with a weeks notice. Mistake, decide what day you wish off and stick to it. You want to protect your day off such that colleagues understand that you do not work on that day. Block days/ hours out on your calendar such that people realise you are not available.
Thanks. With the great input from all of the comments so far on this thread (including yours), what I may do is offer for the next year to go down to 4 days a week, all remote, and offer as tribute the one task that has been bringing me into the office and one that there is a pretty clear path to be handed off quickly, if my boss is willing to give up a slice of fiefdom. I do think there will be a heavier workload in this first year in the transitioning of some of my existing projects, which will have to be rebuilt from scratch. This would not be much of a negotiation, since health insurance is still part of the deal for PT/4 day employees.

Then, late next year, another reassessment, maybe down to three days depending on what has and hasn't transitioned. We'll see. With a job that can be done fully remotely, I can probably still be pretty happy even with what isn't really that big a drop in hours. But we'll see what bubbles up. Next conversation is scheduled for a few days from now.
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Old 10-26-2021, 03:02 PM   #15
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Just remember that when you drop a day you drop some pay. Do not increase the hours you work on the other 4 days.
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Old 10-27-2021, 09:03 AM   #16
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Just remember that when you drop a day you drop some pay. Do not increase the hours you work on the other 4 days.
Thanks. Hopefully by handing off multiple projects, a drop in hours worked will be built in.
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Old 11-03-2021, 06:50 AM   #17
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Just following up that it looks like all systems are go as far as department management goes that I will shift to 30 hours/week at the beginning of '22, though I still have to talk to HR to find out exactly what it means in terms of benefits. And the assumption is that probably in a year or so, once my big projects are moved, I'll probably cut back further.

And being fully remote unless some specific need brings me to the office is green lighted too.

It's pretty much a perfect scenario for me at this stage, jettisoning the projects that are full of angst and pressure and just keeping the little things I enjoy doing, and that I can do from anywhere.

I don't think the meeting with HR will bring any deal breakers for me, since all I really care about is staying on the company health insurance. But I'm still very interested in how it will be set up. (Sounds like they are also pretty "creative," in a good way, in making things work. This is a well-known company, but it's not really a Megacorp in terms of how they treat employees.)

So, onward.
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Old 11-03-2021, 06:56 AM   #18
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Excellent. Are you dropping a day or reducing hours per day. If itís a day youíre dropping, I assume it will give you a longer weekend
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Old 11-03-2021, 07:05 AM   #19
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Probably reducing hours. My job is very fluid in a 24/7 operation, and I'm immediately dropping one responsibility that is equal to one day a week of work on site, and so beyond that I imagine some weeks it will be a whole lot less than 30 hours. But there are no time clocks. And if I don't have to go into the office on any sort of schedule, it's all fine with me.
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Old 11-03-2021, 07:08 AM   #20
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The "hours" thing is a perpetual conundrum. As an exempt employee (but not a manager or supervisor), and with responsibilities for projects that support a 24-hour operation, I have just always sort of been operating as "if the work needs to get done this minute, I'll do it this minute."
First of all, Congrats!

I went on reduced hours for a bit, although involuntarily (well, that's what they thought ), and I had to really put my foot down to avoid working as much or more than I did as a full-time employee. They were treating the reduction in hours as a reduction in pay for the same amount of work. I was in a position to push back on that, but others in the same boat weren't and it was pretty much understood to be a pay cut.

Sounds like you're not at all in the same situation; I'm just sayin'.
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