Annie

This is a tricky one!

Technically, your company is allowed to ask you to do this. You don’t have to agree – but that could put you out of a job.

You need to make sure that you get in writing how long the 50% cut will be for – two months, three months etc. Confirm an end date! They also have to write to you to confirm the pay cut with reasonable notice – they can’t suddenly deduct pay from your already-worked hours this month.

You can also:
1) Suggest 50% pay for reduced hours

2) Request equity in the company (where appropriate) as an alternative

3) Ask for an agreement that the remaining 50% be paid at a later date in the form of a bonus for extra time worked

4) Accept the offer and start looking for another job!

Companies can do things like this in times of severe crisis, like we’re in now. It’s not ideal – because you’re essentially putting equity into the company for free – but if you want to stay with your employer, could be the only solution. Pay cuts like this often mean the employer is trying to keep as many people employed as possible – cutting everyone’s pay drastically helps them keep more people in work.

Sorry to be the bearer of bad news, but I hope this has been helpful!

Hi Paul,

You may be eligible for Universal Credit support if your income has been reduced. It depends on your circumstances (such as whether you live with a partner who is also working), and if you have any savings or assets (like second properties).

If you have capital over £16,000 (either on your own or between you and your partner), you won’t be eligible. Anything between £6,000 – £16,000 will reduce how much you’re entitled to, but you could still get something.

Head to the Universal Credit application page – fill out the answers and it’ll tell you if you’re entitled to receive benefits. Hope that helps!