About a third of companies cut employee pay in response to COVID-19, survey finds
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As bad as the pandemic job losses have been, with around 31 million Americans on unemployment rolls, it could actually have been worse. Some companies have managed to cut their labor costs to save money, without resorting to permanent layoffs — at least so far.
In a recent survey of HR managers, outplacement firm Challenger, Gray & Christmas found that 1 in 3 companies cut employee pay in response to the pandemic.
“Of that group, 55% reported the cuts allowed them to avoid layoffs,” said senior vice president Andy Challenger.
The thinking from these companies, Challenger said, is “we’ll have our team intact, it won’t hurt morale so bad by letting people go.”
Even when companies do reduce payroll, some are trying to retain ties to their workers.
Among S&P 500 companies that have cut staff, three-quarters of them have done it through temporary furloughs rather than permanent layoffs, said Ganesh Rajappan, founder and CEO of the analytics firm MyLogIQ.
“I believe it was done to retain talent,” he said.
Rajappan said among companies that did furloughs or hiring freezes, about a quarter also reduced pay for top executives — though some of those cuts have since been restored.
COVID-19 Economy FAQs
It’s still the question on everyone’s minds: What’s going on with extra COVID-19 unemployment benefits?
The $600-a-week payments have ended, officially, as of July 31. For now, there is no additional federal pandemic unemployment assistance. House Democrats want to renew the $600 payments. Senate Republicans have proposed giving the unemployed 70% of their most recent salary by this October, when state unemployment offices have had time to reconfigure their computer systems to do those calculations. Until then, jobless workers would just get another $200. But, nothing has been signed into law yet.
What’s the latest on evictions?
For millions of Americans, things are looking grim. Unemployment is high, and pandemic eviction moratoriums have expired in states across the country. And as many people already know, eviction is something that can haunt a person’s life for years. For instance, getting evicted can make it hard to rent again. And that can lead to spiraling poverty.
Which retailers are requiring that people wear masks when shopping? And how are they enforcing those rules?
Walmart, Target, Lowe’s, CVS, Home Depot, Costco — they all have policies that say shoppers are required to wear a mask. When an employee confronts a customer who refuses, the interaction can spin out of control, so many of these retailers are telling their workers to not enforce these mandates. But, just having them will actually get more people to wear masks.
You can find answers to more questions on unemployment benefits and COVID-19 here.
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