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
What do vaccines mean for economic recovery?
COVID-19 is not going anywhere anytime soon, according to expert witnesses who testified at a recent hearing held by the Joint Economic Committee. Put simply, we can’t eradicate the virus because it infects other species, and there will also be folks who choose not to get the vaccine or don’t mount an immune response, according to Dr. Céline Gounder at NYU School of Medicine & Bellevue Hospital. “That means we can’t only rely on vaccination,” Gounder said. She said the four phases of recovering from the pandemic are ending the emergency, relaxing mitigation measures, getting to herd immunity and having long-term control.
Can businesses deny you entry if you don’t have a vaccine passport?
As more Americans get vaccinated against COVID-19 and the economy begins reopening, some businesses are requiring proof of vaccination to enter their premises. The concept of a vaccine passport has raised ethical questions about data privacy and potential discrimination against the unvaccinated. However, legal experts say businesses have the right to deny entrance to those who can’t show proof.
What do I need to know about tax season this year?
Glad you asked! We have a whole separate FAQ section on that. Some quick hits: The deadline has been extended from April 15 to May 17 for individuals. Also, millions of people received unemployment benefits in 2020 — up to $10,200 of which will now be tax-free for those with an adjusted gross income of less than $150,000. And, for those who filed before the American Rescue Plan passed, simply put, you do not need to file an amended return at the moment. Find answers to the rest of your questions here.
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