Employer reducing salary?

[Fantasmic303]

Does anyone have any experience or legal background re: salary reduction by an employer?

My father recieved notice today that, as of Monday, his salary will be reduced by 15% due to the impact of the economy. It's not just him, of course - it will affect everyone working at the company. He has been working at this job for about 25 years and has witnessed the decline of management, but this really caught him off guard.

Unfortunately, I don't doubt that this is legal, but my mother requested that I do a little research on what the law actually says, so if anyone has details about where to find the information, I'd be grateful.

I've tried to explain to her that with business so bad (although you'd never know it by the number and quality of ads his dealership runs and the perks his superiors receive), it may have been a matter of reducing everyone's salaries or letting a number of people go, but that's of no consolation. My parents (as we all have) have seen their living expenses increase dramatically, and now the cut in income will definitely be felt all the more.

I guess I shouldn't complain about not getting a raise this year - obviously things could be worse.

 

[Tink888]

I'm sorry this is happening to your father. Unfortunately it's happening to a lot of people. Unless your dad signed a employment contract with his employer that outlined salary terms or is in a union, there isn't much he can do. It's just become the way of the world now that employers can reduce wages, benefits, etc and employees have one of two choices - accept it or find a new job.

 

[Shugardrawers]

I doubt I'll be of any help but my ex husband came home about a year into our marriage in 1989 and told me he'd been told his wages were being reduced by .25 per hour. That doesn't sound like much but it was a LOT to us. There was NOTHING we could do unless he wanted to find a new job. He was non union and didn't have a contract. Three months later we lost our medical benefits and since it was shortly after the first indication of pelvic cancer I'd had, he found a new job. Good thing since now, 18 years later I'm still battling it. But it has yet to beat me Look back, make sure what you are LEGALLY, entilteled to and demanded that. If it's not enough, MOVE ON!!!!

 

[kirbsam]

it will be even worse when obama raises your employers taxes and small business employers will be laying off people.

 

[Fantasmic303]

Thanks to both of you for your responses - I appreciate the support.

Unfortunately, my father is now in his early 60's, and, having done pretty much one job for his entire life, his options for other employment aren't too optimistic. He'll have to stick it out where he is and hope things don't get even worse. Of course, that's the other factor in all of this - he doesn't have a clue how this will impact his retirement.

Shugar, firstly, good for you beating that cancer! And secondly, I don't doubt .25 was substantial - it would still be substantial for me, and I'm assuming it would've stretched at least a little further back in 1989.

This is the first direct hit anyone in our immediate family has taken - I hope it's not an indication of what's to come. I work in non-profit, and it doesn't look good - the food bank shelves are empty, holiday donations are expected to be down, and, of course, the number of requests just increase. Unfortunately it's things like this that make it difficult for those who have always given to be generous with such an unclear future.


Thanks again...

 

[Shugardrawers]

Thanks for the Kudos but if I made it so can your dad I divorced my ex in 1990, lived on my own until 2000 an married my beloved in 2001. IT'S HARD!!!!! But it can be done.. In my case it took nearly starving, I hope and pray your father is FAR FAR FAR better off than I was

 

[LuvOrlando]

-

 

[horseshowmom]

OP, I'm really sorry about your dad's situation. Back in the spring, my brother was told that his job location was being moved about 55 miles away. He would receive no additional salary. That basically meant that he was taking a pretty large cut out out of his net pay since that's where the extra gas money had to come from (about $500 a month, but it's gotten better since gas prices have dropped here). He was already driving about 25 miles to work. Now, he spends about 90 minutes each way in his car.

He has a really good job with a very good salary, and it would be very difficult to replace it in today's market, so he does what he has to do to keep his job.

Of course, he was pretty lucky because quite a few of the others lost their jobs (and all of these people, including my brother, had been with the company for more than 20 years).

Good luck to your dad!

 

[bicker]

This hit us in 2002. We were hit with variable pay cuts, ranging from 10% for the workers that the company couldn't afford to lose , up to 35% for the workers that the company would prefer to have left. Unless you have a contract, we work at leisure, meaning we can leave at any time, and they can reduce our pay at any time.

This pretty-much continued until last year, when salaries started going back up again. Now, I suspect that salaries will at best stay steady for a few years, or perhaps we'll have pay cuts again.

Perfectly legal.

And completely unrelated to who's in the White House.

 

[lillygator]

sorry this is happening, but I think I would rather take a paycut and still keep my job.

 

[powellrj]

we were hit in the last couple of years. DH is now making about 30% less than he was 5 years ago but there really isn't much we can do about it. He is really too old to start a new career and we don't want to move because our parents are in ill health ( DHs parents have both since died of ALS and cancer) and our kids are in high school.

We are just hoping that our jobs will be around long enough for us to retire from them.

 

[PatsGirl]

Last year my Mom was given the option of reducing her vacations days by 2 (16 hours) or taking a cut in pay. I thought it was nice that they were given a choice as some people just couldn't do without the $$ in their paycheck each week but could give up 2 out of 10 vacation days. Mom has been with the company for more than 10 years so she gets 15 vacations days and decided to give up her 2. She is now hearing about further cuts but that is to be expected especially in non-profit social service agencies.

 

[Christine]

My best friend's husband had to take a 5% paycut a few months ago due to the economy's downturn. The company probably could have just cut 2-3 positions and left everyone else's salary alone, but they valued all of their employees and didn't want to burden who was left with extra work and no more compensation. This is fairly standar procedure when profits are down and they want to keep going.

Sorry about this for your dad but hopefully the economy will recover soon and not get any worse.

 

[crz4mm2]

5 years ago I took about a 40% pay cut.
I no longer work at the same place...

 

[Iluvthemouse]

Jan 2008 I was cut from salary to commission only position. I was told if I wanted to keep a job I would have to go to commission.
Luckily I am breaking even with my salary even considering all the taxes.

 

[Jennasis]

One of my clients is a lwayer. Her salary was just cut as well.

 

[dvcgirl]

Yeah, the good ole' pay cut. DH went through a long series of these in the dot.com bust days......in the end he was laid-off (the very last guy to go in his satellite office).

Unfortunately, there's nothing you can do except tighten your belt or look for another job.

 

[Kathi OD]

Sorry this is happening to your dad. I do understand that it can really cut into your budget, but have them try to think about how they could have been worse off....a 15% cut is better than having no job at all. Lots of people in that situation.

I remember stories about how an uncle of mine was a big shot manager at a Proctor & Gamble location, I think it was in NJ. When the depression hit the REALLY big shots announced that they would like to keep as many people as possible, but that there would be sacrifices. Well, as time went on there were more and more reductions in salary and lower and lower jobs taken until my uncle ended up emptying out trash bins for a living. In order to keep guys like him on, P&G gave out stock, which was worthless at the time, as bonuses. Well, my uncle stayed with P&G and kept his stock even as things improved and one day he was sitting on thousands & thousands of dollars. Enough in those days to settle all his kids into their lives and give himself one awesome retirement. I guess different people would have a different take on the story, but I always thought it was pretty cool of P & G to try and keep him on like that.... but that was then.

I guess if it were me I'd count the glass as half full and start looking for another position in a larger company less dependent on peoples luxury spending.

My grandfather worked for Sears during those years and they did pretty much the same thing, however my understanding was that while they cut hours and wages, they didn't lay anyone off, gave what at the time was worthless stock to their employees to compensate for the loss in wages. 30 years later he and my grandmother were very wealthy compared to most of their contemporaries.

 

[BriarfoxinWA]

The bank I work for announced a big re-organization on Friday. We all new it was coming but weren't sure what the outcome was going to be. Basically I still have a job but will be doing twice the work for the same pay. We had one manager laid off and I am taking her place. She and I thought that was what might happen but I really wish they wouldn't have let her go. She had 19 years with the company.

Well at least I still have a job.

 

[momto2girls]

Sorry this happened to your dad. We may need to consider something similar for our small business. We will need to crunch numbers to figure out if we need to get rid of benefits, decrease the salary of employees or just lay off 1-2 people instead. Tough, sad decisions, but necessary in these economic times, especially if taxes increase.