Employee volunteer to reduce pay (long post, sorry)

**Vanilla** · 08-15-2010, 03:35 PM

I’ve been seriously thinking of asking my boss to reduce my hourly wages 28%.

Would this show I am a team player to the company or is this a stupid idea? Has this been done before?
This is the background story:
My previous employer went bankrupt 6 months ago; my current employer took over that company’s business, kept me on their payroll for a year (re-negotiate end of term). I am being paid on hourly wages & bonus on # of transactions closed each month & $200 medical reimbursement monthly. The business is not going well, so it is a negative cash flow in my job position, I can almost see that by end of Feb, they will lay off me. I could claim unemployment, but that would be less than the reduce wage, or I can go independent & compete with many others (in my same field) out there.

There is an independent contractor (who used to be my assistant) is luring businesses away from me with a reduced service fee (already lost quite a few contracts to her in the last 6 months

). The only way I can get more business (back) is to ask my employer to reduce the service fee, in order to balance that; I shall need to reduce my hourly wage (keeping the bonus & medical pay the same). By offering this, I might be able to keep my job for longer time until the market picks up. When the market was good, my job used to increase company’s profit margin.

I’ve already re-do the budget, discuss with DH about this anticipate ‘pay cut’; he’s okay with this. Fortunately, his pay is stable, we have savings (about 4 months worth of living expenses), another BEF; we shouldn’t need to dip into the savings. Originally, my pay was to snowball credit card debts, with a little left over for savings. With this pay cut, we plan to pay minimum to credit cards, cut back on all expenses, & put away all extra cash in savings. Later on, when market is more stable, then we can pay the cc debt in full.

Thank you for reading this long post.

**frugalwarrior2** · 08-15-2010, 04:15 PM

What indicator show the market is going to be better anytime soon. Economistic aren't sure. I would just keep snowballing and saving. Spending as little as possible depending on how much you have to go. Maybe be the time it goes under(providing it does,unemployment can handle the snowball.

**kita** · 08-16-2010, 10:44 AM

Generally, men are better at this type of negotiation than women. However I understand that you want to keep your job, if you are volunteering to lower your pay there needs to be something in it for you. This is for partly for your self-esteem but also for the comfort of the boss. If I were a boss I would not be happy with a volunteered for change that is only to my benefit. I would be worried that there was a catch somewhere or that your would not work as hard after the change.
However, you might ask for greater compensation for your sales. Less base pay, greater sales. Even if it means that you current sales pay stays the same for the first 50 and then in the second 50 of the month your pay raises and then the third fifty is even higher.

**Vanilla** · 08-16-2010, 01:53 PM

Originally Posted by frugalwarrior2

What indicator show the market is going to be better anytime soon. Economistic aren't sure. I would just keep snowballing and saving. Spending as little as possible depending on how much you have to go. Maybe be the time it goes under(providing it does,unemployment can handle the snowball.

I agree there is still a long way to go before the economy will be better. At this time, I feel that I would be more comfortable to cash on hand (savings in the bank) than to snowball the cc.

**Vanilla** · 08-16-2010, 01:55 PM

Originally Posted by kita

Generally, men are better at this type of negotiation than women. However I understand that you want to keep your job, if you are volunteering to lower your pay there needs to be something in it for you. This is for partly for your self-esteem but also for the comfort of the boss. If I were a boss I would not be happy with a volunteered for change that is only to my benefit. I would be worried that there was a catch somewhere or that your would not work as hard after the change.
However, you might ask for greater compensation for your sales. Less base pay, greater sales. Even if it means that you current sales pay stays the same for the first 50 and then in the second 50 of the month your pay raises and then the third fifty is even higher.

Thank you so much for bringing up the boss’s viewpoint. I’ll do a comparison of different base salaries & bonuses on # of transactions. Then I might be in a better position to negotiate with my boss & convince them that I’ll still work as hard as before.

**mek42** · 08-16-2010, 03:19 PM

Will you be making you future unemployment even lower if your reduced salary only prolongs an inevitable company death? How do you know that the savings from your salary will be wisely invested for the company as a whole?

Most importantly, if you were interviewing for the job, would you be willing to accept it at the lower pay?

**Vanilla** · 08-16-2010, 10:22 PM

my answers to answer your questions,

Originally Posted by mek42

Will you be making you future unemployment even lower if your reduced salary only prolongs an inevitable company death? even with the reduced wage, I believe my unemployment pay will be the maximum allowed.
How do you know that the savings from your salary will be wisely invested for the company as a whole? Not sure, probably will just show as profit in the book.

Most importantly, if you were interviewing for the job, would you be willing to accept it at the lower pay? I think I would try to look for other job opportunties.

Thanks, Mek.
I was only thinking about keeping the job, but it seems like offering wage reduction might not benefit me, would even shortsell my work experience & reputation in this field.

Hmm, need to re-think.

Thanks again.

**ncarr** · 08-17-2010, 06:48 PM

Originally Posted by kita

However, you might ask for greater compensation for your sales. Less base pay, greater sales. Even if it means that you current sales pay stays the same for the first 50 and then in the second 50 of the month your pay raises and then the third fifty is even higher.

I think this is preferable to just volunteering to reduce your salary. Also, I wouldn't make this suggestion unless they mention cutting your position.

**scottp999** · 08-18-2010, 07:01 PM

Once wage deflation takes hold (at a macro level) it is hard to stop it. I would not offer to take less pay unless there is was no other option.

**NikoSan999** · 08-18-2010, 07:05 PM

If they are going to let you go, they are going to let you go. Take the money and stuff a mattress. It will come in handy when it happens. Maybe it won't happen ( fingers crossed ) and you'll just be that much further ahead.

**Vanilla** · 08-18-2010, 08:17 PM

Thanks, Scott.
Thanks, Niko.

Probably because I'd been with my previous employer for over 12 years, even though the last 3 years, they'd asked me to cut hours, but when the market was good, they gave me (& across the board) extra bonus, days off & other benefits. I am dealing with a different employer w/ very different method of running the business.
I guess I was just too worry of losing more contracts & might get lay off sooner. A little too desperate!

Thank you all for pointing things out to me.

I'll now continue do my best at my job, save up as much cash as I can. During the meantime, keep my eyes & ears open for job opportunies, so if/when they let me go, I shall be prepared.