Can I Be Forced To Take a Pay Cut During COVID-19?

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It’s no secret that COVID-19 has radically modified the best way that the world operates. We’ve traded busy parks and cafes for Zoom conferences in our dwelling rooms. Some companies have skilled a serious increase because of COVID-19, however different, extra conventional companies have seen a pointy decline in income, and plenty of have shut their doorways completely.

In an try to maintain their doorways open, many companies have turned to pay cuts and layoffs to save cash. For those who’ve been impacted, you is perhaps questioning, “can I be forced to take a pay cut?” Learn on to find out about your choices.

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How COVID-19 Modified the Financial Panorama

COVID-19 has basically modified the world in quite a lot of methods. It shouldn’t be a shock that it has turned the world financial system on its head.

Companies that have been thriving earlier than COVID-19 grew to become a family title have needed to shut down or drastically change the best way they do enterprise. The toughest-hit has been companies that depend on prospects coming by way of their doorways and making purchases, particularly retail shops and eating places. 

Even establishments of upper training have felt the financial impression of COVID-19. College students that after crammed residence halls and lecture rooms are actually pressured to attend lessons from their mother and father’ residence. 

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Value Saving Measures Companies Are Taking

Companies have many ways in which they’ll reduce prices to remain afloat. They could decelerate manufacturing, however they’re extra more likely to make cuts to the workforce. The next measures are widespread methods they make use of to avoid wasting on overhead.


Furloughs are put into place when an employer is experiencing a tough patch, however they don’t wish to lose all of their workers. As an alternative, furloughs act as a short lived type of layoff till the enterprise is in a greater place, financially.

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Furloughs can function in quite a few other ways. Some employers unfold out their furloughs all year long. This implies an worker must take a number of unpaid days per thirty days, however they gained’t should lose out on quite a lot of pay all of sudden.

Employers who’re in a very tight spot can furlough workers all at one time. No matter how your employer operates their furlough, they’ve an finish date, and you might be anticipated to return to your outdated wage as soon as the furloughs finish.

Hour Cuts

One other cost-saving measure employers put into place to save cash is slicing the hours every worker works. Which means workers who have been as soon as full-time may begin working part-time as an alternative. This could additionally impression your eligibility to obtain advantages by way of your employer like medical insurance.

Pay Cuts

If an employer needs to take care of the full-time standing or their workforce, they could select to chop their pay as an alternative. This helps workers retain their advantages whereas additionally saving cash on pay. 


In case your employer is in a pinch, it could be mandatory for them to put off some workers. They might or could not supply severance packages for workers they lay off. They might additionally present incentive packages for workers who’re close to retirement to retire early.

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Can I Be Compelled to Take a Pay Minimize?

The reply to this query shouldn’t be reduce and dry. It boils down as to whether you might be an exempt worker or a non-exempt worker. For those who aren’t positive which class you fall beneath, then consider it as salaried versus hourly pay.

Exempt Workers

Exempt workers are workers who obtain a wage for his or her work and subsequently are exempt from receiving additional time pay. 

Employers can reduce the wage of exempt workers as long as they don’t reduce their pay to lower than $684 per week. In the event that they reduce the wage beneath that stage, then your employer should pay you additional time for the work you set in over 40 hours per week.

Non-Exempt Workers

If you’re a non-exempt worker, then your employer is legally permitted to chop your hourly wage or reduce your hours. Take into account that your employer can’t reduce your wages beneath the federal minimal wage, $7.25 an hour. 

In case your hours are reduce, however you’re employed additional time, you might be nonetheless entitled to time and a half. In case your employer cuts your hours however the calls for of the job power you to work extra hours, then your employer should pay you for the time you labored.

Your Choices

Lengthy story, brief, sure, it’s attainable in your employer to make use of cost-saving measures similar to pay cuts with a view to maintain their doorways open. If you wish to proceed working in your employer, then you’ll have to acquiesce to their calls for.

That mentioned, you don’t have to stick with your employer for those who really feel like they’re making the most of you and the pandemic financial system with a view to maximize income. The job market isn’t essentially sturdy proper now, however you must all the time weigh your choices once you get hit with pay cuts or furloughs.

You are able to do this in considered one of two methods. You possibly can stick it out in your present place till you discover a new job, or you may give up altogether and begin on the lookout for a brand new job full-time. The latter choice ought to solely be pursued if in case you have sufficient cash to remain afloat for a number of months with no job.

In case your private financial savings isn’t prepared for the massive hit that comes with unemployment or pursuing different job choices, then you must learn extra now about the right way to turn out to be extra solvent.

Are You Apprehensive About Your Monetary Future?

For those who’ve discovered your self questioning, “can I be forced to take a pay cut?” you must know that you just’re not alone. Lots of people are attempting to navigate their monetary and profession choices in as we speak’s COVID financial system. For those who’re anxious that your employer is violating labor legal guidelines, then you must contact the US Division of Labor.

Do you wish to keep on high of the newest information about COVID-19 and the job market? You’re in the proper place! Try the remainder of our weblog for the whole lot you must know to be effectively knowledgeable. 


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