What if you get hit with pay cut?
By Amy Lindgren
Knight Ridder News Service
Times are tough all over — at least, that's what some companies are telling their employees. With a struggling economy as the backdrop, some firms are asking their workers to "share the pain."
Everything from a one-time reduction in hours to permanent wage rollbacks is on the table as management looks for ways to streamline company expenses.
For some employees, this turn of events is more unwelcome than a direct layoff. At least with a job cut you feel free to move on with your career. When the boss asks you to stay but at a lesser wage, there's a sense of being tied to the mast of a sinking ship.
Suspicion haunts the worker asked to take a cut. Will the changes really be temporary? When the good times roll again, will management remember the people who made sacrifices? Is this request just the first step in a long, depressing slide into bankruptcy for the company?
If these questions gnaw at a worker's trust, the next one takes an outright bite: Are things really so difficult, or is this just an opportune time for management to roll back employee wages?
If you belong to a union, you know this question is at the heart of many a protracted discussion between your representatives and the management of your company. Union or no, most people aren't in a position to know the truth about a company's finances.
What you do know is your own situation and what you want from this company. Or do you?
Following are some steps to take if your company asks for cutbacks. If you are being represented by a union, check with your steward to see which steps might apply to you.
• Ask for time to respond. Never give an immediate answer to such a complex proposal. Try to push back a decision at least two or three business days, to give you time to check details that may not be clear to you.
• Request the proposal in written form. Barring that, take good notes while being told the specifics. You need to know exactly what is being asked of you.
• Ask for details on how the change will affect your duties, benefits, customer relations, etc. For example, if your boss wants you to cut back to four days a week, is your vacation also cut back? Will some of your duties be reassigned, or put on the back burner, or cut out altogether? Will your customers need to be notified?
• Check with your state unemployment office to see if you can file a claim based on a wage cut. If the cutback is substantial and involuntary, you may be eligible for temporary assistance.
• Evaluate your own goals. This is as good a time as any to check on your vision for this job. Without this setback, were you planning to stay? Did you have goals to reach a certain position or wage with the company? Are any of those goals likely to be achieved now?
What about your future plans? If you had intended to switch jobs anyway, or were planning to go back to school or retire soon, this may be a good time to get serious about those plans. Perhaps your employer would be willing to lay you off completely in order to leave everyone else's job intact. If so, you may find you can bargain for a severance package or other assistance; at the very least, you are likely to be eligible for unemployment funds for a short time.
• Consider other compromises to propose to your employer. Are you willing, or able, to take on the work currently performed by an outside service? Perhaps you have an idea that will save money in your department. Ask your boss if he or she would consider such proposals, and how much money you need to "find" to offset your salary.
• Refocus your response to the situation. It's natural to resist a request to give back salary or benefits. But if the finances are truly as bad as the boss says, fighting will not solve the problem. Instead, focus on cutting your losses.
For example, it is better to give up a day of work than to accept a reduced hourly wage. Then you can use the extra time to take classes or look for other opportunities. Also, if the company rebounds, they will be quicker to restore that day of work than to increase your wages. Another compromise you might accept is to receive health benefits while cutting back to part-time hours.
