Pay cut: Can my employer cut my pay?
Many people are being asked to reduce their pay or hours of work amid the coronavirus crisis. If your employer is struggling financially from the impact of the pandemic, they may ask you to take a pay cut or to work fewer hours. But do you have to agree to this request? Express.co.uk brings you all the information you need to know on your rights during these tough times.
What are the employment restrictions during the pandemic?
Currently, everyone should stay at home until May 5, 2020.
If you are a key worker working in essential health, social care or other essential services and are unable to home, you can work and travel to work, according to Citizens Information.
When travelling to and from work, you will need to bring your work identification or a letter from your employer and another form of identification.
Everyone else must not leave their homes unless they are buying essentials, seeking or offering medical or necessary help, or going out for one form of exercise a day.
If you can perform your role from home, you should do so.
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All non-essential services, shops, pubs, restaurants, and cafes have been forced to close by the government.
Other businesses have been forced to shut because of a lack of customers due to social distancing.
The Government has put in place the Coronavirus Jobs Retention Scheme, which promises to pay up to 80 per cent of wages for those who are not working but kept on payroll.
But even this may not be enough. Now many employers are asking staff to take a pay cut or to reduce their hours.
Can my employer cut my pay?
It is illegal in the UK to impose a pay reduction without consent.
Shân Evans, of People Management, explained: “Legally, an employer cannot impose a pay cut upon its employees if they have an employment contract that sets out details of their salary entitlement.
“This decision is, therefore, one the employees in questions will have to consent to.
“They are not obliged to give their consent, and they could take legal action to prevent such a change.”
This means if your employer wants to cut your pay, they have to ask for your permission first.
You can refuse a drop in wages, but you would be risking termination of your contract completely.
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During these difficult times, it may be essential for your company to cut costs – and pay cuts may be the first thing bosses consider.
However, bear in mind the reasons your employer is asking this of you.
Citizens Information Ireland says: “If your employer tells you that he or she is unable to continue employing you on your current terms and conditions of employment you need to consider your employer’s request very carefully.
“You should ask your employer for details of the reduced business activity, who else has been asked to reduce their hours of work or pay and what were the criteria for selection.”
Taking a pay cut may be advisable if it will help protect jobs in the long term.
CI added that when deciding whether or not to agree to working reduced hours or to a pay cut, there are a number of issues to be considered:
- Reduced pay – what are the implications of this – for example, money and tax and paying the rent or mortgage
- Scheduling of working hours – it may suit you and your family to reduce your hours, for example working a day less per week or 2 hours less each day.
- Downturn in business – what choice do you have. If you don’t accept a reduction in your working hours or pay, your employer may decide to make you redundant.
Can my employer put me on furlough?
If you are unable to go to work, if you are self-isolating, in quarantine, or unable to work from home, you may be furloughed.
Again, your employer must ask you first and you must agree to this step.
The Government’s Jobs Retention Scheme ensures those furloughed will have their 80 percent of their wages covered, up to £2,500.
Some employers are offering to top up furloughed staff’s wages with the remaining 20 percent.
However, employers are not obliged to do so.
Can my employer reduce my hours?
Your employer can cut back on your hours if it says they can in your contact.
If it doesn’t, they can’t do this without you agreeing first.
Again, you can refuse a cut in hours but that may mean an end to your contract completely if they can’t afford to keep you on.
There must be a fair consultation period before they come to this decision.
The Jobs Retention Scheme unfortunately only applies to those who can no longer work at all.
However, you are entitled to guarantee pay during short-time working.
This means you can get £29 a day, but the payment is limited to only five days in a three-month period.
Can my employer make me redundant?
If your employer has chosen to make you redundant, despite the government scheme, they must follow the usual rules.
Each company’s policy differs, but if you have worked for your current employer for at least two years, you should be entitled to:
- Half a week’s pay for each full year you were under 22.
- One week’s pay for each full year you were 22 or older, but under 41.
- One and half week’s pay for each full year you were 41 or older.
Can my employer change my annual leave?
All workers on PAYE payroll- around 30 million people- have the right to statutory annual leave.
Most workers who work a five-day week receive at least 28 days of paid annual leave a year.
This works out to around 5.6 weeks of holiday.
One year’s annual leave must be taken by the end of the year
Most contracts have a clause in it that says holiday can only be taken when it works for the employer.
This means your annual leave requests can be rejected.
During the pandemic, your employer might ask you to take some of your annual leave earlier than you would have liked.
Or, they may cancel some holiday you have booked in.
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