Pay Cuts Turn Ugly
Image by Roger Blackwellvia Flickr
Companies have moved beyond reductions in force to reductions in pay and not just at the top. This can range from an across the board 5% salary cut to more interesting and perverse variations on the theme.
The last scenario I heard yesterday was from someone working at a privately held company on the East Coast struggling to survive that cut back everyone to a 30 hour work week. Of course they are expected to produce the same results. In addition they were being paid every two weeks but that has been extended to three weeks but with only two weeks pay.
In effect, this adds up to a 50% pay cut. These people would have been better off laid off so they could collect unemployment insurance and have the time to look for a new job.
Are there any protections against this egregious behavior? In some cases if you have an employment contract, and in some states, there is legal redress. And if any wages are withheld for work already done then you have a legal claim.
We life in tough times right now but this too shall pass. When the good times come again, then those companies who acted unfairly and unwisely in their treatment of their employees will rue the day that they did.
The best way for employers to mitigate problems is to proactively engage their employees in dialog about the needed reductions and to try to find common ground that everyone can live with. This then engenders buy-in and support resulting in a less demoralized, more productive and engaged workforce.
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