Temporary Salary Reduction Agreement Template

Once you have made these items, you must inform your payroll team and prepare your staff for any questions employees may have about the new wage reduction policy. Before you create your own pay cut letter for your employees, you need to decide if this is the best option for your organization. Here are some benefits of a pay cut: Once you`ve analyzed all cost-cutting methods in the same way as above, analyze the financial impact they will have. From there, you have to choose as many methods at once to achieve your financial goal. If you are willing to participate in the salary reduction program, please fill out your information below and send this form to [insert the name] by [insert a date]. If you have any further questions about this, please contact [Enter the name and contact information.] 3. Define the dollar or percentage you want to take from your cheque. A dollar amount is a specified amount that you want to reduce (by salary period or per year) and a percentage would be a percentage of your salary. Yes, a reduction in salary is legal, provided the worker accepts the reduction and the adjusted salary is above the minimum wage. Finally, you need to understand what this means for the organisation when the Wage Reduction Directive is completed.

Are you going to re-insetronize the original salaries? Or will you give increases to match your salary now if there had been no pay cut? The best time to reduce wages is that a possible reduction in working time in force is several months. 5. [REDUCTION IN PAY OR BENEFIT: Employees in the following positions, [THE DESCRIPTIONS] are asked to temporarily reduce the salary from [old] [DATE] to [DATE] to [DATE]. [MANAGER] will discuss the impact of this development and ask employees to sign a confirmation of a temporary change in conditions. NOTE: High risk and must be agreed with staff on a temporary change to the terms agreement. Taxation is possible (v risky) provided that a consultation has taken place with staff. Reducing wages cannot bring the wage rate below the UK minimum wage/national subsistence in a single pay period. As mentioned above, the company is experiencing a significant decline in operations due to the global pandemic of COVID 19 (coronavirus).

In response, we use a [temporary/permanent] pay cut to avoid redundancies. Your employees will ask you when after the discount, they will receive increases again, and you must be able to answer them honestly. And if you think your organization needs to keep wages reduced longer than your annual review cycle, it may be helpful to put in place a wage freeze. This document mentions the names and addresses of the employer and the worker, the employee`s current salary, the reduced amount and the date of validity. Here are the various points that you should include in your salary reduction letter: I refer to our meeting at [insertion date] on whether you are willing to accept a reduction of [amount] per [year/month/hour] to a new rate of [insert] per [annum/month/hour].