Legal Comment Regarding PERMANENTLY Reduced Hours

 

Due to budgetary constraints, some participating employers in PSPRS and CORP are considering PERMANENTLY reducing the number of hours for their full-time employees from 40 hours per week to some number of hours under 40 hours per week.  The enabling legislation for both plans defines "member" in part as an employee "[w]hose customary employment is at least forty hours per week and for more than six months in a calendar year."  See A.R.S. §§ 38-842(26) (PSPRS) and 38-881(20)(c) (CORP).  We interpret this language as requiring an employee's customary work schedule to be at least forty hours per week, and also requiring an employee to work more than six months in a calendar year.  "Customary" means "usual."  Therefore, a reduction of an employee's usual work schedule to less than 40 hours per week would render the employee ineligible for membership in PSPRS and CORP.   Thus, a legislative change will be required if employers wish to reduce the usual employee work week to less than 40 hours per week without jeopardizing their employees’ membership in PSPRS and CORP.