Company that wanted its workers’ stimulus checks apologizes for ‘ill-advised’ plan

WLNS ^ | Posted: Mar 31, 2020 / 11:58 AM EDT / Updated: Mar 31, 2020 / 11:58 AM EDT | Jody Barr

[Zhang Fei]

AUSTIN (KXAN) – The company behind a plan last week to cut some of its employees’ pay checks if the $2-trillion COVID-19 stimulus bill was approved has now changed its mind.

The plan would’ve allowed the company to reduce paychecks by the amount of stimulus payment expected from the government.

The company wanted those workers to sign what it called its “Employee Emergency Compensation Fund.”

The agreement would have also allowed the company to take 50% of the stimulus act’s $500 per child credit.

A worker who asked that we not identify him provided KXAN a copy of the letter last week. The worker also asked that we not identify the company because he did not want any fallout over the company’s plan to negatively impact his coworkers’ ability to continue earning a living.

The company went unidentified until the company sent KXAN a statement Monday. The statement was sent from a public relations company on behalf of ImageNet Consulting. The statement was attributed to the company’s president, Pat Russell.

While there was uncertainty about the federal government response, we also asked a small group of employees to reduce their compensation by an amount equal to any government support they received,” Russell wrote in the statement. “Our intentions were to serve the greater good and protect our most vulnerable employees. However, we understand our plan was ill-advised. We have rescinded the potential program, and we apologize for any pain or confusion it caused.”

Russell said his company was trying to figure out how to deal with what he called “massive business disruptions” related to the COVID-19 pandemic and the pay reduction plan was their way of “…ensuring we could keep as many people as possible employed for as long as possible. We implemented a series of steps to cut costs

[Political Junkie Too]

I don't think it's as easy as that.

If the employee is salaried, then it doesn't matter how much or little they are working since their pay is established on an annualized basis. Their are rules governing performance management and salary adjustments.

If they are covered under collective bargaining, then there are already rules in place on how pay is to be managed through union representation.

If they are contract workers, then there are contract terms in place, including termination clauses and billable hours.

If they are "at will" hourly workers, then either terminate them outright or don't, but I don't think they can vary the pay on an arbitrary basis.

-PJ

[EVO X]

If they are paying an employee who is not working, I’d think they can pretty much dock him whatever they want.

These companies have to follow state and fed labor laws. If you have a signed salary contract, the company can't just change it on the fly. They can certainly ask one to change it. There are also prevailing wage laws, etc that may come into play if the firm does business with government. The proper way is to do furloughs and layoffs.

That said, I remember some Freepers mention they took pay cuts to save their companies during the last crisis.

[trebb]

Unless the top dogs give up their pay for ‘the greater good” of the company, they have no right to ask anything like that of the workers...

[GOPJ]

Russell wrote in the statement. “Our intentions were to serve the greater good and protect our most vulnerable employees.

Yeah right. Where's the letter to the 'most vulnerable employees' telling them of their upcoming bonus? LOL... what jerks.

[zeugma]

Not a word of truth in what that guy said. It is an IT services company. Our industry is ass over teakettle right now supporting all the work from home stuff.

I concur. That's my line as well.

[Svartalfiar]

The plan would’ve allowed the company to reduce paychecks by the amount of stimulus payment expected from the government.

The company wanted those workers to sign what it called its “Employee Emergency Compensation Fund.”

The agreement would have also allowed the company to take 50% of the stimulus act’s $500 per child credit.

And how does the company know who gets the credit and who doesn't? Maybe half their workers' wives make enough so their employee doesn't get any free cash? Maybe their employees work freelance side gigs, or have a lemonade stand, that puts their income above the stimulus level, even though company pay doesn't? Would all of those people still have gotten their pay cut? How does the company know how many kids each employee has, in order to steal half the $500 per?

[SendShaqtoIraq]

no it wasn’t ill advised. you were trying to STEAL from your employees. (not that i think everyone should get this)