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
SHAREHOLDERS WIN!
You really don't want your hourly rate to go down. It sets a bad precedent. Try to negotiate working less hours and getting paid accordingly.
What was the reasoning they gave for lowering hourly rates rather than hours?
I agree, but I can imagine being one of the few to question the company wide reduced rate will surely lead to you being one of the first to be made redundant should that (likely) be necessary in the future…..I just didn't quite see the reason why they wouldn't just drop everyone's hours…..less work, less hours, less wages..
If you are in any of the aforementioned professional service firms, the generic official response is:
"Gotta keep da cash flow, yo."
I was going to ask if you were part of a union but then I remembered how the NTEU was trying to do dodgy behind their members' backs…
This really sucks :/
Don't know if you saw this guy >>> https://www.reddit.com/r/Accounting/comments/g2woz3/open_let…
It's risky putting your head above the parapet
Also, if you are Deloitte, didn't the deal include 10 extra days paid leave? Kind of makes up for it over the course of 10 weeks?
Yes the 10 days certainly helps and roughly halves the blow (plus the fact of our marginal tax rates means money in the pocket isn't as badly affected as the headlines would suggest).
Wow Nick Holloway! Amazing! Haha not sure I will do that. Feels like your biting the hand that feeds you.
Yes but a lower hourly rate means a lower payout of that happens.
maybe they're planning to cut hours after everyone has agreed to cut hourly rate (i.e. your pay gets cut twice)
I've seem justification in other industries that a 20% paycut WITHOUT a reduction in hours enables the benefits to stay the same - same accrual of leave, including long service - dropping down to 4 days a week makes these accrue on a pro rata basis, making the employee lose out.
Of course the employee loses out either way, but I agree that costs need to be slashed to save jobs - as long as dividends aren't being paid out to shareholders I don't really have an issue with this as a temporary extraordinary measure - everyone needs to take a hit here to stop chaos
Everyone in our company got moved to 4 day part time contracts (80% pay) then a few days later told we need to work full time hours at the new pay rate. Worst of both worlds: leave accrual and salary at lower rate, hours the same as full time :(
Yikes
Were you able to negotiate this with your employer?
Accruing less than half a day of annual leave and long service leave in exchange for an extra day of free work isn't a great trade. Also if they then make you redundant anyway it might save them a whole 20% on the payout.
If the work is less there should be less hours worked. Most of these businesses are billing based on hours worked.
Also grateful to have a job still - been asked to take a 40% pay cut with a 40% reduction in hours. (i.e. still work 3 out of 5 days)
Pondering what to do with the extra days that could generate income
So some rate, just less hours? This is what OP should be going for.
Our company did that then told us we still all need to work full time hours :/
7/11, uber eats, uber, cash wash places.
"Cash wash places?" Like money laundering? 🤨
Ovato Print? :(
Sounds illegal
That's why you see it's 'asked'.
OP can say no but probably won't help in long run as a 'company/team player'.
I'm an auditor myself and know many others in the industry.
Many firms are suspending promotions and refuse to even grant the title (no pay rise) as it may mean they breach the pay award.
I don't understand how a 20% pay cut but 100% hours still keeps them compliant with the pay awards? I'd be especially worried once unpaid overtime is added on….
Anybody better versed in pay awards care to shed some light?
They're not award workers? Plenty of places have you negotiate one on one for your pay and you'd be paid above any applicable award rate.
I'm not familiar with the type of audit you're doing, but you could potentially be covered by the Professional Employees Award 2010. Have a look in there for the definition of auditor and whether that covers the type of work you're doing.
If you are covered, then the award sets a minimum annual rate of pay of just over $51k. However, this excludes compensation for overtime, and depending on the amount of overtime completed, then there may be a potential claim if the effective hourly rate falls below the award (Google for the Professional Employees Award Pay Guide for easy to use hourly rates).
Good to know, I'm actually an engineer but that seems to be the same award. Don't know anyone who gets paid that little, but as you say, this is more for overtime calculations.
@Zephyrus: I'm an engineer and I've read my contract thoroughly with no mention of any awards as well.
Imagine just being promoted prior to the pay cut. Now doing twice the work with half the pay. WEOEOEOE
Would rather be promoted even if for the title rather than have progression freezed for 12 months
With the March and June year end looming, getting a pay cut for Auditors is a slap in the face.
Could be worse, if co workers get made redundant then your hours go up.
I’ve had a haircut, reduced hours still working the full hours tho, make an extra 200 dollars than my neighbour who sinks piss and yells at his kids all day
But working is better than not
I’d rather be busy with extra work thrown my way than be seen as having capacity. Impressions matter In The corporate world. Put aside the unfairness and consider how much it would suck to be on Jobseeker at 300 a week.
750
my neighbour who sinks piss and yells at his kids all day
Hey! I still 'work' a full time job from home while I do that!
Thank you for your service.
Hi OP, is your rate of pay after the cut still above the minimum award or agreement rate if one applies to you? If not it's likely unlawful and you should report this to FWO.
Yes,it is.
Hi OP did your employer provide a time frame of when this will apply until? Mine was 3 months, but the employer can extend this at their discretion
Until October for us, with a review then also.
extension at employer's discretion: might as well be indefinite
Be careful. Make sure any arrangement has an expiry date.
Negotiating to drop to 4 day weeks is a good idea.
Agreed
Make sure any arrangement has an expiry date.
So much this. The missus offered to have her hours reduced so that others in her department wouldn't have to be stood down. She can only do it for 6 months at the very most though before we start running dangerously low on savings.
There's been reports of employees agreeing to pay cuts and employers subsequently going into administration or handing out redundancies.
Whilst these are "trying" times and businesses are trying to keep trading and stay afloat, employees must look after #1. Themselves.
This is what concerns me. By the time you get hit with a redundancy, you have used up annual leave and also taken a pay cut. So you end up with a much lower redundancy package.
Work 20% less efficiently.
Haha, someone else mentioned this to me also!
i think a lot of firms might be doing this, friend said they might not be able to collrct client fees.
Accept the new pay rate, but look for a new job at your old rate, or more than your old rate. Then when you find a job the old employer will promise to match it, but really they just want you to stick around until they can replace you, you are dead to them now.
New job in the current climate will be tricky and risky!
I work in this Industry. My recruiter says the market is 'tumbleweeds'. I would say accept whatever you have to, continue to keep your boss happy and bide your time. I think things will snap back to normal pretty quickly.
In the same boat, object to the pay cut and receive the same salary. What's to lose?
I think it's a 'object to paycut - lose job' type things….
That's the tricky tradeoff. They can't force you to accept but if you all do then it's likely they can avoid redundancies and benefits greater good.
Some of our teams have been asked to drop to 4 day working weeks. Executives and directors are paid 4 to work 5 day weeks. The financial models suggest this is sufficient to keep us going till end of August. If this situation extends beyond that, then there'll be a Plan B.
Yep, definitely. I guess I was just surprised 4 day weeks weren't the initial solution. Their reasoning was it didn't deal with declining market conditions with regards to cashflow…..I didn't get it
@JuryWheel: It means that they want to be able to "buy work" so that they keep revenue coming in and jobs ticking over even if they can't profit. If they just cut hours then best case they have 20% less work once it becomes profitable again and worst case another company with deeper pockets steals all their clients and they fold.
My team has constant work year round, why should we cop this for the 'greater good'? I don't see large bonuses being flowed through the rest of the firm in a good year for these teams which seem to be without work right now.
@lakes_8: obviously depends on your industry and the business Cash Flow. Why should you cop it? To keep your job of course. obviously if the business is not suffering from Covid then you should not be copping or accepting any reduction. As Krankite says, a lot of businesses are basically buying work to keep cashflow going so that they don't have to fold or sack a heap of people.
Your job?
Welcome to modern white collar slavery. You work 120% but get low-middle income with no pathway but to work harder than the guy aiming to compete with 121%. Government offers you minimum tax cuts and no social security benefits.
Now surrender your dreams or surrender your job.
you are working from home right? How is your company going to know if you are doing 8 or 6 hours a day?
Because we don't get paid by the hours, rather the results we deliver.
And they are cutting pay due to less work, right? So work less.
And they are cutting pay due to less work, right?
That's what they are saying. It remains to be seen if there is actually less work or if they are just being dodgy and trying to get cheaper labour to do the same amount of work.
My salary is < 65k/y and I got 15% cut, same hours I would say. currently working from home only.
Should I contact Fairwork?
Do you have agreement in place? Technically they have to give you a new "contract" and you have to agree on that, otherwise they need to make you redundant. That's at least what i understand
No new contract or agreement, everything was delivered verbally through Zoom video from the boss.
Does Zoom video also work from the moon?
I don't think they can do that, it needs to be a new agreement. Companies can't just cut the contracted rate because of financial reasons. But it really depends on whether or not you want to make a big deal about it.
If it's not in writing, wait until this has blown over and put in a legal claim for the underpayment - but have another job lined up and be willing to burn the bridge.
before this, I was doing part-time as well (4.5 days/wk) and salary was prorated accordingly. Now it's taken a further 15%.
Anyway I'm working 15% less efficiently and 15% less hours (only I know) than before. Been searching for new jobs but it's very hard atm so might stick with this for a while.
p.s the boss told us to expect pay cut for around 6 months
Don't know who decided that 6 months was the magic number but it sure gets thrown around a lot.
@[Deactivated]: Deloitte is 5 months and their decision was based around the government’s current plan/forecast of the pandemic. It will be reviewed on a monthly basis to see if it needs to be extended.
Salary adjustments have to be signed to be in effect. Your boss cannot force you to take a pay cut while keeping the same hours. They have to ask you to agree in writing (By signing a document)
Usually in these scenarios you have no choice but to agree (Or risk being chopped) but you still have to agree.
Can you provide a link to the law you are referring to that requires a signature for change in wage?
If I remember correctly, from that 1 law unit I did way back in uni, a signature isn't necessarily required. It has something to do with the doctrine of acquiescence. This legal principle is to the effect that the introduction of a unilateral amendment or variation to the terms of a contract by either party may result in an enforceable obligation upon one party, irrespective of conduct on the part of the other party, which can be interpreted as consent.
Not refusing = you've consented to it.
Happy to be corrected if I'm wrong.
Fat should definitely be cut from the top ie the equity partners. They share the firm's profit every year so why not the losses once in a while.
Lawful or not though, Deloitte not formally reducing hours in effect doesn't make too much difference. In a client service environment, you do what it takes to serve the client not how many hours go into your timesheet.
Many people would be happy with a temporary 20% pay cut rather than full stand down with no pay right about now.
I agree. I was just curious about their decision to cut wages rather then hours….
To be clear, I work for a pretty smallish business (around 150 staff), not Deloitte etc…would you rather some work 4 days a week or 5.
lots of companies doing this, now your redundancy is cheaper too
I wonder if they'll pay a dividend to the shareholders given business is so bad. It wouldn't surprise me, and I bet the bosses give themselves a big fat bonus when this is all over.
Take a pay if you are on over 250k by 20% fair enough - ie CEOs, executives, MPs etc
taking a pay cut if you making less then 100k hell to da no
The majority of the staff are in the second bracket,with very few around 250k….
It is a hard question you haven't given enough information
If you dont take the pay cut what happens? if you get to get sacked what would your pay out be? how easy would it be to find a new job in your field?
From what they've been telling us, nothing happens.. you remain on the same salary and there will be no witch hunt. No basis on getting sacked either.
@sahh: Is the pay cut permanent or just for a few months?
Because if it is a temporary pay cut then you can tough it out 4 a bit a permanent cut will could 8 years to claw back the 20% you lose…
The average salary increase in Australia is like 2%…i dare say the next couple years this figure would be a solid number for some ppl
There's a big gap between $250k and $100k.
Out of curiosity will you still be on six figures?
The 'gap' is the room for personal circumstances if your on 150k that is a good salary for more people and a 20% pay cut would be reasonable
HOWEVER if you are on 150k but have 4 kids a large home loan and are the solo bread winner in your family then a 20% pay cut is something you cant really afford…..
If you don't accept presumably you'd leave your job?
I would fire you for not knowing the difference between then and than
Bit harsh…
Deserved.
"Deloitte staff were told the salary reductions, along with other cost-cutting moves, are the best way to protect their jobs.
However, the pay cut will also have the effect of softening the reduction in profits that equity partners share.
Chief operating officer Andrew Griffiths told partners in a Zoom meeting the firm needed to achieve $100 million in salary reductions to maintain its gross margin of 46 per cent, according to participants in the meeting."
https://www.afr.com/companies/professional-services/deloitte…
This is a small-mid size business….