Hi all
Firstly let me say I am happy that currently I still have full time work.
Just wondering if anyone else has had a circumstance where their employer has asked all staff to take a 20% pay cut, but keep the same hours - as oppoyto a 20% wage cut by dropping to 4 days instead.
Thanks
Work Reducing Wages by 20% - Same Hours
JuryWheel on 22/04/2020 - 15:58
Comments
Has anyone contacted Fair Work, and can provide the answer?
Saves us all speaking with Fair Work, and reduces their queues…
Advice for one person isn't necessarily correct for another person. Workplace laws are complex. Best to obtain advice on your specific circumstances independently.
My husband is going through this same thing right now. Salary cut 20%, but still expected to work full-time hours.
I called Fair Work on his behalf the other day. There isn't anything he can do about it, UNLESS the reduced hourly rate puts him below his award amount based on his classification.
Important to note, he is award covered, there is no EBA.
Agree with the above, best to seek your own advice.
Where does OP work?
I had the same issue in the past when I was not getting paid the correct penalty rate for working on a public holiday.
The award rates are so low, that award rate + public holiday penalty was still less than what I was getting.
@greatlamp: (If I read your comment right) consider yourself lucky, most retail workers are on the award minimum and don’t get commission.
This pandemic is highlighting a lot of flaws with our wage system and jobseeker etc (hard to imagine the normal rate is $520/fortnight). We def don’t have the world’s worst system, but minimums should be raised across the board. If the work needs to be done, companies will hire. Penalty rates and permanent benefits over casual are a whole other issue in terms of perceived costs and liabilities to an employer (and how likely someone is to claim maternity leave etc) but I digress lol. Sorry, most of that wasn’t directed at you, i just went on a tangent.
I believe that because those company does not loose revenue enough to claim job keeper for employees. If their revenue reduce by20% then working hours should be less too for everyone but if employer try take advantage to pay less and still make same money then I believe need ask explanation in written and if possible try to team up with other employees because always more people more power. Good luck from those dodgy employer.
Umm no did you read the article. It's for everyone above 65K
Deloitte has asked staff to agree to a pay cut of 20 per cent for five months and will reduce partner pay by up to 25 per cent as the firm seeks to generate at least $100 million in savings to offset the downturn caused by the COVID-19 outbreak.
but no employee will have their salary fall below $65,000 a year.
Damn it, you replied as I was editing!
At least Deloitte is
just doing it to the partners. I heard another Big4 is doing it to all the staff.Edit: Oops only read the headline. RIP
The "partners" actually own the business so they should take a damn sight more than a 25% pay cut. In the good years they rake it in big-time and pay staff the same, now it's getting tougher they are only prepared to take a pay cut about the same as the staff
@Ocker: If they're owners in the business they'll be taking a "pay cut" through the reduced profits of the business.
@Seraphin7: My point is that in the "good" years it was the partners the reaped extra income - not the workers.
Now things are tough they only want to sacrifice 5% more than the workers that make their business what it is.@Ocker: At partnership level you’re more involved in relationship management or sales. You could always apply for a sales role and reap the rewards of a commission driven role.
@Sbah22: Yes, I'm aware of that. I would assume the "pay cut" referred to the salaried "partners".
The real/equity partners are the ones whose net returns will move up and down in correlation with the profitability of the business.
@Seraphin7: Pretty sure even salaried partners get paid % of their profits - hence they also earn big in the good years
@Love a bargain: They will likely be entitled to "bonuses" … along with the rank and file staff. Of course, those higher up the tree get larger bonuses than graduates, both in absolute and percentage terms. That's the nature of business.
Depending on how you view bonuses in terms of your actual earnings, salaried partners (and others) will likely take a hit greater than the 25% (or whatever the percentage is in each case) as the bonuses evaporate.
@Seraphin7: My point is - even the salaried partners enjoy the upside when business is booming when staff are expected to put in extra hours while on a pretty much fixed salary but when the going get tough, they demand staff to share the pain
@whooah1979: Being able to exploit the situation doesn't make it right.
The risk and return should align. If the "owner" is happy to take the upside when business is good, it's only fair that it should also wear the the downside when business is not-so-good.
that's esp true if there's enough work for the staff to be working full-time hours, they should be paid a full-time wage
@Love a bargain: Their employees still have jobs. That is fair. Or would they rather join the unemployment queue?
@whooah1979: You're talking about what they can do and I'm talking about what's fair and just.
Totally different perspective and I'll leave it at that.
P.S. If employees are still required to work full-time hours, whether the business can afford to get rid of them without affecting output/ capacity is debatable.
@Ocker: partners pay cut - that's a pre-emptive strike against public opprobrium
yes I read my shares - maybe Scentre, spun off Westfield (shopping centre international empire) as their Australian shopping centres - execs were taking a pay cut
and I thought how nice - (I'm making it up here - can't be bothered looking for the specifics) - if CEO takes 10% less than $1Mpa - he'll 'make do' with only $900K this year.
whereas most of the zero hours independent contractors simply get told - no more work - sorry - see ya !
the other day a guy who has been renting an inner city car space from me for the last 4 years rang to tell me his work as a building security guard had just told him he was stood down wef yesterday, and to use his holiday pay.
Before the virus he recently got a new car - and he's now stressed about the car payments. That may be a forced sale if this continues …
will reduce partner pay by up to 25 per cent
You know that 1% reduction satisfies "UP TO 25%"
It's a bit like the stores "Up TO 50% discount", where you can't find anything discounted more than 20%
@cameldownunder: Not really. At least one partner would need a 25% pay cut otherwise that wouldn't be accurate, and it doesn't make sense that one person would agree to 25% while the rest all get 1%.
I don't think any store advertises "up to 50% off" despite the maximum discount being 20% (otherwise why not make it 99% off!) - there's probably just a limited range of junk at 50% that you're either not interested in or sells out immediately.
Downturn? Don't Deloitte hand bankruptcies? They're handling the administration of Virgin Australia. They're going to be making a fortune restructuring debt in the coming years.
@macrocephalic: Do you have any idea how big a firm like Deloitte is? While their bankruptcy department might do well, it won’t come anywhere close to offseting the revenue they’re going to lose in their other divisions. All professional services firms are going to be smashed for a while
@hayne: I wouldn't worry when they bill out grads at least twice what they are being paid. Plenty of fat stored from the good years.
Deloitte did this so that partners did not need to take a 50% hit to their partnership distribution.
i.e. nobody needed to take a paycut if the partners simply took a hit of 50% to their partnership distribution. Note partnership distribution is on top of the partner's pay.Basically staff too a cut to pay the partners…
this is simply the fat cats making sure they don't get burnt as much by burning everybody who works for them.
Pretty sure KPMG is doing that as well. It’s more fair to cut hours thus lesser pay received.
KPMG introduced it the same way.
I'm at Deloitte so in same boat as OP.
Although if I were at EY or PwC then I'd probably have hours unaffected at all because it's basically business as usual for me.
Yes but what I mean is Deloitte and KPMG went with a blanket 20% cut for everyone and unaffected hours
PwC and EY are cutting based on need/demand for work - so some areas might get cut 40% and work 3 days a week, others remain on full salary and work full time. I would be one of these people.
From the news it looks like only the recurring stuff like audits and tax would be continuing without much slow down.
But would it not be more work because our retail shut downs and impact on hospitality? So if I invest in these industries then the audits would be something I'd have to pay attention to?
Very true. Much of the lost revenue likely to be in the consulting and advisory businesses. Nonetheless everyone feels the pain
@Spicytunaroll: 'everyone feels the pain'
yairs - as I was saying at the Royal Golf Club the other day - or was it my friend's yacht ? - things have been so difficult lately …
@Hangryuman: I was addressing Unorthodox's comment that audit/tax divisions of those organisations were not slowing down but employees of which still wore the pay cut.
Curious - Did Deloitte offer redundancies if you didn't agree to take the pay cut?
^ Deloitte Employee. Working full time engagements still. No redundancies at this stage; but future redundancies (if required) would be at the rate before the cut.
Heard it’s common across industry.
how to get past the pay wall?
use the website called outline
And I thought it couldn’t get worse than working super long unpaid hours at the big accounting firms. Partners take on the profits when times are good, but transfer the risk to employees when times are bad. Great model!
Capitalism 101.
That's why we pay a higher percentage of tax than many big businesses and high wealth individuals.
Working from home or attending office/business?
Home now. Office normally
Then yeah my wife is in the same boat. 20% pay reduction. Same hours
Does the company receive jobkeeper? If so they can do a lot of things that may be illegal in normal times.
It's all about survival at the moment. Give and take. Make sure your employer remmeber what you did.
It also depends on if you have a career in the company. It's unprecedented times.
I believe so, yes but not 100%
If they receive JobKeeper one of the things they cannot do is reduce the hourly rate. One of the things they can absolutely do is reduce the hours worked (potentially to 0). As well as instruct employees to take annual leave provided they have at least two weeks leave remaining after taking it.
Yes you are correct. The hourly rate can't be changed. But the number of hours worked can be discussed.
Do you have any links to this re: job keeper eligibility and the 'cant reduce hourly rate' part?
Payment of wages when an employer is accessing the JobKeeper scheme
A qualifying employer must ensure that they pay an eligible employee an amount that is at least equal to the full JobKeeper payment of $1500 each fortnight (before tax).
An employee’s hourly base pay rate can’t be reduced by a JobKeeper enabling direction or agreement. Employees must also continue to be paid applicable penalty rates or other allowances that apply to the hours they work.
If an employee worked enough hours during a fortnight so that they’re entitled to more than $1500 that fortnight (before tax), including any applicable penalty rates, allowances, loadings or leave payments, the employer must pay them the full amount.
https://coronavirus.fairwork.gov.au/coronavirus-and-australi…
Note that if employees agreed voluntarily to reduce wages before this who knows what that means. They probably can't get back to full pay without a further negotiation. You couldn't voluntarily or by direction have had your wages reduced below any awards in either case.
Everything is deflating at the moment, including your wages. Sorry to hear.
I agree, work is certainly slowing, which I would have assumed would have let to a reduction in hours…
If things get any worse, I'm sure you'll see hour reduction on top of reduction in wages.
I think they will start looking at all options….they have already flagged enforced annual leave and standing people down for periods
Except house prices which are still skyrocketing apparently
The latest date show a small quarterly growth. But that's most likely due to the growth in Jan and Feb rather March. Highly unlikely we'd see any growth in the next few months when actual unemployment is over 10%.
People on jobkeeper aren't considered unemployed technically, but that's just technicality. The government is printing money to hire everyone. We're going to pay for it ultimately with 100% confidence.
Who's upset about the international students not getting enough support again?
Highly unlikely we'd see any growth in the next few
monthsYears when actual unemployment is over10%30%Fixed it for you
wait till people come off the mortgage deferral in 6m time.
a good fraction of them might still not be able to find work and they will eventually become 90 days past due and the Banks will have to figure out how to sell the houses from under them without destroying the property market.say if the unemployment rate is 10%, I would not be surprised if the # of mortgage deferral is 10%.
There is ~10m dwellings in Australia and ~7m of them have mortgages.
@10% deferral rate, that means 700k dwellings are deferring.
each year 500k dwelling are transacted.Say 50% of the people on deferral get a job back, the Banks will have to sell 350k dwelling in addition to the normal year where 500k dwellings are sold… sounds like oversupply to me.
If you're looking to buy, I would wait 6-9m when people get the 'O sh#t moment'.
most probably a good 4-7% decrease in property price and would not be surprised if it drops as much as 8-14% unless people are put back to work (which is going to be difficult when the rest of the world is also screwed)don't count out the boomer government to bail the property market out. Too much too lose for these Boomers…
They'll start FHB with 95% LVR loan without needing LMI and perhaps extend it to any Tom Dick and Harry who want to keep the ponzi scheme going. Probably would also lessen restriction to our foreign overlords as well. The population would probably accept this given so much of the population's wealth are riding on house prices keep going up!
Just watch, this is the real 'Too Big To Fail' sector! No doubt the current/next generations would pay for this, but by then those boomers would no longer care.
Some nice well thought out estimates there @SeVeN11. Cheers.
I haven't been personally faced with this, but one of my close friends has. I reckon at times such as these, it's better for everyone to take a haircut than have massive unemployment.
I wouldn't mind a haircut :)
Tell me about it!
Buy your own scissors and YouTube on cutting your own hair haha
I have thick wavy hair. A pair of scissors in the wrong hands will turn me into this. Has happened before and I'm still traumatised :/
It's either grow it out and tie it back or go a #2.
@[Deactivated]: Hey where did you find a picture of me!
Thankfully my wife is a trained hair dresser, so it doesn't happen much.
Thankfully my wife
The curls get the girls, hey?
I have a lovely wife too :) She's many things but a whizz with the scissors , ain't one.
I just want some hair!!
That'll be $30 for that trim please, don't mind my breathing all over you.
Yes, the reasoning is certainly to reduce wage costs for everyone so as to not need as many redundancies
Have a discussion with your director/manager/supervisor and see if they're willing to accept the possibility of you working less hours for the same pre-cut pay rate.
You can work out the required reduction in hours that'll equal the same net saving for the employer as the pay cut, and this way you can get something favourable out of it as well. Unless you're considered an essential worker or unless your organisation is laying people off and/or understaffed, I don't see why they wouldn't allow that; I've heard many similiar stories to yours at the moment and the underlying theme seems to be that employers are willing to be more flexible than ever with working hours and working arrangements.
Management should trim the fat from the top, those who need to make sacrifices are upper management. No point cutting 20% from a graduate or someone on the lower level.
I agree. I receive the lowest wage at my work (trust me I know) and currently everyone is taking 15% cut only (not 20% like the majority here)
My salary now is like 1/3 of an upper management person.
With due respect, what do you expect your salary like compared to your upper management? 1/3 isn't that bad really.
The pay gap is huge, at least for accounting. 10% off a big four partner’s drawings (draws 400k to 900k) vs 10% off a Senior’s pay (73k+). Reducing from the top will have more meaningful savings. And also getting rid of non-performing managers drawing 120k+ will be better cost cutting.
@Flowerbomb: How are they supposed to survive with $400k less… they’ll be on the street before we know it!
P.s. that’s sarcasm
@Flowerbomb: Assurance groups have 100+ staff, dropping 10-15k per staff member is a bigger drop than dropping 300k each from 3 partners.
@yoyomaster123: There’s way more than 3 partners per 100 staff. Also the Senior managers and directors who are drawing a significant pay.
@Flowerbomb: Well thats why its a pay cut across the board, drop of 300k was also a high estimate -> 1.5m draw down per partner is probably a bit high.
Nobody likes taking a pay cut understandably but lets not try and justify that partners taking a bigger cut is actually more meaningful in anything other than a leadership sense.
Agree with your second point regarding non-performing managers but i don't think its that easy to identify who is under performing from a top-down perspective especially as manager performance can be obfuscated by the juniors they manage (i.e. covering for under performing juniors or taking credit for over performing juniors)
All in all, 20% paycut across the board isn't nice or probably even fair but I'd say its the fairest option given the resources available.
Management should trim the fat from the top, those who need to make sacrifices are upper management. No point cutting 20% from a graduate or someone on the lower level.
I get where this sentiment comes from but in reality it's a terrible idea. The people at the very top of an organisation are single handedly responsible for whether or not that organisation survives this financial crisis. Some may not. If the organisation fails then the graduate will take a 100% pay cut.
I work for a big company and were doing very well at the moment. Business is growing and they're even hiring new staff. That has nothing to do with the graduates and everything to do with the CEO and other senior managers who are drawing on their decades of experience, working round the clock to ensure the business stays viable. In times like these I'm sure as hell glad my CEO takes home 2 million a year. Anything less and he might go to one of our competitors, help them stay afloat while we hire some second-grade manager who drives us into the ground.
Pats and slaps on the backs and congrats on a great idea to all the board members that give themselves a pay rise for saving so much money…
Or, how about they don't make $100M profit this year and take it out of the much higher ups million dollar plus salaries instead of the guys in $74k/y. It might mean one less Mercedes Benz or Range Rover that year, but the real labour of the workforce might appreciate it…
I'm all for more wage equality, but given we don't live in a country that wants that, I don't see why people on 74k/y should be seen as vulnerable and in need of protection.
If you earn that much but don't have any form of safety net, is it not your fault? I know I for one would love to be earning that much (it may not sound like that much, but remember the majority of the country earns significantly less than that).
I’m not talking about wage equality, I’m saying that the fat, rich arseholes at the top of the tree, who usually have the least amount of work to do, and who don’t really contribute that much, but seem to take most of the wealth, are usually the first to suggest cuts to those at the core of making them their money. They never start with their fat cat pay cheque’s that would keep multiple actual workers employed. They cut the pay of the workers so their mega-million dollar salaries are not impacted… A company would continue to work without/huge reduction to all the bullshit top heavy over paid management. Remove the workers and see just how much shit gets done.
And I would say that $74k/y is (fropanity) all when you take out mortgage payments, car payments, rates, multiple kids and everything else. Now, $2.3 million + bonuses is basically “what’s a mortgage and what are car payments??” territory. (and I’m not talking about low income earners, because the example was for people over $60k. People under that are not affected.)
Do they? Because anecdotally whenever this is raised I tend to see the "fat cats" having their wages cut at a similar percentage to everyone else's. They certainly are in the cases being discussed above.
That's an incredibly bizarre way to phrase it - "if you exclude the majority of Australian earners who are on less than this, it's actually not that much". Ok… I'll counter that with "if you exclude all the high earners, those on 74k are super rich".
Though the point you keep making is that the gap between lower and higher paid workers is too large, which I agree with, so I'm not sure where we're differing (except for you just not liking the term "wage equality"?). If you're not making that point then I see absolutely no justification whatsoever for the "fat cats" to have their wages cut more than anyone else in the company?
My boss works 6-7 days a week. He might not be doing low-level stuff like me, but he's definitely working.
Definitely nothing fatcat about that!
To answer multiple comments, directors have taken a 50% cut which is good to see.
Yes it is , your pay cut can help their share program become worth more lol .
The morale is high as their 50% cut hopefully keeps productivity up and again shareholders win .
https://www.fairwork.gov.au/contact-us