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Lay me off, it pays more…During the COVID 19 Pandemic some workers are facing pay cuts

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Lay me off, it pays more…During the COVID 19 Pandemic some workers are facing pay cuts

By now, we all know that many people have received the news of layoffs because of the Covid-19 pandemic. We also learned that many of those on unemployment receive more money on assistance than those working. 

A recent authorization specialist for an ophthalmology office in Bourbonnais, IL, who asked to be referred to as Taylor, talked to me about being fired from her job. 

Taylor made about $1300 every two weeks when she was employed, but she now makes roughly $1900 bi-weekly while being unemployed during the covid-19 pandemic

On Wednesday, March 25th, the $2 trillion aid package was passed. According to nytimes.com “The government will pay the wages of some workers who remain on their companies’ payrolls. It will sustain other workers who have lost their jobs with checks that are as large as — or even larger than — what they were earning before they were laid off.”

This NPR article breaks down what’s inside the $2 trillion corona aid package:

For small business owners (500 employees or less) there are emergency and forgivable loans. The $10 billion emergency fund gives small businesses up to $10,000 for immediate operating costs. The $350 billion forgivable loan could be forgiven if used to maintain payroll, pay rent, or any existing debt could be forgiven as long as workers stay with the company through the end of June. 

For big businesses the loan set aside a $500 billion that will have to be paid back.  

The article states, “The bill establishes a fully refundable tax credit for businesses of all sizes that are closed or distressed to help them keep workers on the payroll.” 

On top of firing employees, some companies are decreasing pay, forcing people to work the same amount of time, with an increased workload for a lower wage. 

According to shrm.org:


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Castle Credit Customer Service Representative, Laneisha White says that she’s been treated unfairly since the start of the corona pandemic. “I don’t feel like I’ve been treated fairly at my job, due to a paycut and workload add.” Caste Credit is a financial institution located in the Civic Opera Building downtown Chicago. She currently works from home until further notice. 

Castle Credit has let go of about 13 employees during the pandemic. Some workers are working from home, while others are going into the office. White says that her job is requiring much more of her and her coworkers after they decreased their pay. She says that she is grateful to be working and to be able to stay afloat.

But should people really be grateful to be able to work for less pay? Employees that are furloughed will receive unemployment benefits and will be able to come back to their jobs when the stay at home order is lifted. Granted there has been high demand for unemployment benefits and some people don’t know when these benefits will kick in, but it’s safe to say no one wants to still work for less pay. 

Caste Credit cut their employees pay down to $14 an hour, just one dollar more than minimum wage. After taxes, they roughly make $900 a check, compared to those on unemployment receiving the $600 a week plus their regular unemployment amount. 

How is this fair to working employees? Some may say that businesses have to do what they have to do to cut costs, but this is unjust to their employees who are working during the pandemic, and still have obligations and bills to pay.  

These people can’t apply for benefits after experiencing pay cuts. According to bankrate.com, “Individuals who are able to work from home with pay aren’t eligible for benefits…”

This means that lots of businesses will cut the pay of their employees, making them work the same hours, and possibly increase the workload if they feel business demands it.  

SOLUTIONS:

In this article Companies like PepsiCo and Canopy are increasing pay for front- line workers and reimbursing for things to assist people with making work from home easier and more comfortable. 

Some CEOs are taking pay cuts during the pandemic while others have promised to not make any layoffs in 2020.

Aside from furloughs, more obvious solutions that would be beneficial for both the employer and employee would be to issue a shorter work week. You can decrease your cost, keep the pay wage the same, and give employees an extra day off from work. 

What are your thoughts?

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