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Temporary Pay Cut

SystemSystem 5,885 Posts
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Last year our company was in real financial trouble due to high overhead and a lull in the construction industry. Management called us in one by one asking for suggestions to help our situation. After getting everyone's input, management cuts all salaried office employees' pay by 33% for six weeks. I have a feeling this is going to happen again, because work is slow and nothing has been done to reduce overhead, despite the fact that we could slash overhead in several ways and never even feel it. Is a pay cut like this legal? The field employees' pay was not reduced, only salaried office personnel. That money has not been paid back, and only a vague reference was made that we might be reimbursed. During those six weeks we were required to do our forty hours a week. Input, please!
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  • hrwomanhrwoman 49 Posts
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    I was at a company before where we had to do paycuts as well. Our was a little different than you as we had to sign off stating we have been made aware of the salary reduction and when it was to take place. We were told up front that we would not be paid back. However, we did have the choice to take a 15% cut and work 40 hours, take a 20% cut and work 4 days a week and still maintain benefits or take a 25% cut and go to part-time without benefits. This at least gave the employees an option and a little bit of control. I did the math and only worked 4 days a week. Oh yeah, it was legal as we were given notice and reasons why this was happening. Not a lot of happy employees but we buckled down and got through it. However, if this is happening yearly, but ready to hear it from the employees.
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  • SystemSystem 5,885 Posts
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    I'm bracing for it! The most frustrating part is management's unwillingness to make necessary and obvious cuts. The cut wouldn't hurt so much if much needed changes were made at the same time. I was hoping this was illegal or something!
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  • SystemSystem 5,885 Posts
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    It sounds pretty awful, Linda. I can't think of any legal problems unless someone's pay goes below minimum wage or if the pay cut applies to work that you already performed. Maybe your state law has something, but I don't know what that would be.

    Did top management take a paycut last time? It seems that the last pay cut wasn't painful enough for them, meaning key people quitting, employees contacting a union, etc.

    James Sokolowski
    HRhero.com
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  • SystemSystem 5,885 Posts
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    [font size="1" color="#FF0000"]LAST EDITED ON 05-11-04 AT 09:01AM (CST)[/font][br][br]Management was cut, too. No one quit, which surprised me. I'm going to check our state laws - thanks for the input!

    OK, checked NC labor laws, and there is nothing to prevent an employer from cutting our pay unless it dips below minimum wage, which it won't for the people who will be affected. I don't feel so good...
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  • hrwomanhrwoman 49 Posts
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    Linda - I know how you feel. I've been there. It doesn't give you much initiative to want to go to work. If this is the second time in 2 years, you will probably have some quitting this time. I know I lasted 6 months and then told my employer that I had to move on even though I loved everyone I worked with. Hang in there.
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  • SystemSystem 5,885 Posts
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    I think management should reduce our workweek to at least soften the blow - close Fridays maybe - a big issue everyone voiced was having to continue their full-time schedule at 2/3 of their pay. I'll suggest this if asked, or bug a supervisor's ear!
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  • Don DDon D 9,834 Posts
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    The only accurate portrayal for what is about to happen to you again is "You are getting the shaft!" No two ways about it. Sounds like poor planning which equals poor management which equals tuning up your resume quickly.
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  • SystemSystem 5,885 Posts
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    [font size="1" color="#FF0000"]LAST EDITED ON 05-11-04 AT 10:32AM (CST)[/font][br][br]Too right, Don - it's a combination of zero planning, an HR department with no input, and the owner's inability to separate his personal feelings for employees from our biggest need: the elimination of unnecessary positions and lame employees. My resume is up to date, and it's out there! Somebody fax me that chocolate bar! 7045881219

    One more question - several people have asked me if our pay will be cut again. A lot of folks are worried. Can management force me to tell them who has asked about this? These people came to me in confidence, and I don't think I should have to reveal their names. What do you all think?
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  • Don DDon D 9,834 Posts
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    I wouldn't reveal any names. I think I'd just say, 'Gosh, practically everybody working here.' The chocolate bar is on the way.
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