First things first: Pay cuts are legal as long as they’re not done in a discriminatory way. So, your virtual financial advisors want you to know that if a pay cut isn’t based on an employee’s race, gender or age, then a corporation can reduce their salary as long as it’s at least minimum wage.
Taking a pay cut in the future is certainly not what employees expect when accepting a job offer. But if your employer is having financial difficulty, they may choose to reduce payroll versus terminating positions. It’s important you first digest and process the news, especially if you didn’t see it coming.
So where do you start after hearing the news? Information is key. Your virtual financial advisors suggest fully understanding the big picture. The why, the when and all of the questions in between. You want to ask if this pay cut is a one-time situation or there’s more to come later on. You want to know if it will affect your benefits or 401(K) match.
Will your salary go back to its original amount, once the financial hardship dissipates? Ask about company’s long-term plan strategy and so on. The more you know, the more of an informed decision you can make.
Your virtual financial advisors suggest you negotiate
Your virtual financial advisors suggest you negotiate your heart out. Since your salary will be compromised, ask for benefits to make up for it. Think extra weeks off, more vacation days, retention bonus, working from home for a few days a week, having a four-day work week, and the like.
You can even take it further and try to get gym memberships or wellness programs paid for, tuition reimbursements, or maybe there’s an out-of-town trade conference you’d like to attend or a workshop that the company can pay for. According to the same study referred to above, nearly 70% of Americans value benefits and company culture over salary. So negotiating better benefits may really work out in the end, and your pay cut wouldn’t seem like such a big deal.
A pay cut gives you the chance to do just that. Your virtual financial advisors recommend you stay positive and believe you’ll bounce back. A pay cut doesn’t have to spell out doom and gloom. Should you choose to jump ship so to speak, use that time to freelance, act as a consultant, work part-time or do something that’s beneficial to your wellbeing. A little time off from your routine can do you some good.