1) Don't Accept It Immediately
When your immediate senior breaks this bad news to you, don't let the relief of still having a job make you accept the offer without a murmur. Buy some time, don't immediately concede to it. Even if you orally commit to it, don't commit to anything in writing, you'll have no space to back out otherwise. A verbal consent can be re-tracked saying that, in your haste you said something that you really did not mean, or that you have been misunderstood. The best things to say, is I understand what you are saying but I do not take decisions without taking my family into confidence and will get back to you, after I discuss it with them.
2) Why Do You Need The Extra Time?
You need to assess whether the company is not using the business slowdown as an excuse to cut salaries. Moreover, you also need to asses if a pay cut will affect your severance package, your compensation for unused holidays, reimbursement for sick days that you did not need and finally your unemployment benefits - remember all these are normally calculated on the basis on your current salary and taking a cut in salary could mean taking a cut in all these.
It would do well to remember that you are worth as much as the last salary you drew and your bargaining power, in case you have to look for a new job in the future will significantly reduce.
3) Check Your Contract Terms
If you've been asked to take a pay cut or quit, check your contract terms. Many contracts mention that the employer cannot change the terms of the contract without your consent. If this clause is inbuilt in your contract, you will be within your rights to refuse the cut. The cut in salary would constitute a breach of contract.
4) Questions To Ask Your Supervisor
Once the initial shock is over and you have digested the fact that a cut is imminent and, irrespective of whether you like it or not, you have to accept it, you should ask your supervisor these questions that will help you reach a conclusion as to what your next step should be.
- Do I have the option to refuse the salary cut?
- What is the management’s salary-cut equation based upon?
- Is the pay cut being applied uniformly, or are you being selective?
- Who are the other workers who are also facing cuts?
- What are the chances of you being reimbursed later on?
- How will this affect your severance package, your compensation for unused holidays and reimbursement for sick days?
- Will this also impact future bonuses and raises?
- Does the cut in salary also mean extra hours and additional tasks?
- How is the company planning to turn things around?
Now that you have asked the questions to the supervisors and got the responses, analyze them. You may find that, there is more to losing a few hundred dollars and there are long-term adverse implications. It may suddenly dawn that the company’s has no viable turnaround scheme and that it could fold up and leave hundreds of workers jobless and looking for new jobs. It would be better that you walk out now and look for a job, instead of facing competition from hundreds who are sailing in the same boat as you.
Ask yourself:
- How desperately do I need this job?
- Do I have an alternative?
- In your honest opinion, will the company recover or is going to go even further downhill?
- Are your superiors being honest and can you believe and trust them?
- Is staying on worth the risk?
After making your own decision, it will always be worth your while to discuss it with senior colleagues and trusted friends. Moreover, investing in an employment attorney will be a wise decision, as he will help you let you know of all legal options available to you.
7) Negotiate: The Pay Cut Could Result In Additional Benefits
Once you’ve exhausted all avenues of information and are sure that your decision to stay on is not stepping into unknown realms, see if you can negotiate a better working package. You could bargain for a lesser workload or a four-day week and do some contract part-time job that compensates for your loss in salary.
8) Make A Written Agreement
Make a written agreement, which should include the following details:
- When will the old pay rate be restored?
- What are the reimbursements for lost wages?
- That there will be no further cuts?
- Mention all benefits agreed upon
- Include all terms and conditions of the cut
You will do well to remember that since your employment is "at will," your employer is within his rights to relieve you of your job or reduce you salary, as long as he can prove that he has valid and realistic reason for his actions.
However, if your pay has been cut by an unreasonable percentage you may be able to assuage your quitting pain by collecting unemployment benefits. However, rules vary from state to state and your local unemployment office will be your best guide.
10) Worth Considering
Treat this as a temporary blip in your employment and start looking for a new job, without telling your employer you intend to leave. Continue working on the new terms until you find a new job, which could be round the corner or may take some time.
