20% Paycut

bully1234

We have just been told that we will be having a 20% paycut and given 4 weeks notice. Can my employer do this? Last year 3 people were made redundant because the company was not doing so well.

LittleVoice

They can do it if you agree.
If you don't agree and they believe it is essential to pay you less, then they could dismiss you and offer you work at the reduced rate.
They would still have to pay the minimum wage rates though, of course.

How long have you worked for this employer?

bully1234

6 years with them. The Directors did not pay themselves for 2 months but now it has come to this. We are only a small company 10 people in total and the 20% paycut effects us all until business improves.

blue_monkey_2

If the bosses have not piad themselves that speaks volumes and I guess this descision has not been taken ligtly. I guess they could always get rid of one person and not cut wages but then that person could be you and this is what they are trying to avoid, to ensure that people stay in their jobs. Do you claim Tax Credits at all? You should find out if you are entitled to benefits on the new rate as you might not be much worse off.

I guess that if you do not agree then no they cannot do it. Have they asked or just told you it is happening?

Sorry I could not be more help.

bully1234

What happens if they decide to make me redundant in say 3 months time. Will it be based on old salary or the new reduced 20% salary???

bully1234

They have told me that this is what is going to happen. At the end of the day I'm glad to be in a job, I'm only partime and have to work round children. Don't think I'll be entitled to tax credits, I was earning £7200, going down to £5820 and husband £24000.

ceridwen

This question came up the other day on someone else's thread - I believe I am right in recalling that the answer was that redundancy pay gets based on current salary (even if its less than normal salary).

blue_monkey_2

I am sorry that it is not good news, like you say it is just comforting to be in a job and that the bosses value the staff they have and want to help you all. Do you rent a property as you might get rent and CT help depending on the number of children you have.

bully1234

No we have a mortgage on the property. I can cope with reduction in salary just means the holiday to Minorca looks like it's going to be cancelled and I'll lose my deposit of £530 (my travel insurance does not cover loss of earnings!!!!!!!) Never mind one of those things. My Husband works for Landrover and things in the car industry don't look goog either. At least interest rates have come down and we'll save being on the variable rate from next month!

skylight

https://www.entitledto.co.uk just to see if you are entitled to any help with tax credits or the like.

hampsterpoo

ceridwen wrote: »

This question came up the other day on someone else's thread - I believe I am right in recalling that the answer was that redundancy pay gets based on current salary (even if its less than normal salary).

http://forums.moneysavingexpert.com/showthread.html?t=1374855



"I guess the first question is "on what basis are redundancy payments worked out" - as in are they worked out according to what ones normal salary is or based on the level of salary one has received over the last month or two. If they are based on normal level salary - then that is one thing. If they are based on only the level of salary one has received over the last month or two - then you seriously should not accept a "temporary" salary drop - as that will impact on your redundancy payout.