MrNepathy's Blog

About a month ago, due to high volume and a surge of demands of our services, my department was told that we would have to move back to a mandatory 45-hour work week. It seems that margins are down and so the upper echelon of the company wanted cost analysis reports for the top twenty accounts for each terminal. Someone thought it would be a good idea to demand all of these at once and make them a rush. We were already busy because of various economic factors. In the bad economy a lot of shippers wanted to reduce rates so they have been out shopping for new carriers. Worse still is the fact that UPS and FedEx both decided to move beyond small packages and get into the freight business. They did this at virtually the same time. Yellow and Roadway also merged, creating a larger company. With so many large companies out there, it has created a freight system that exceeds demand. If there are ten companies that each make ten TV sets per year but there are only ninety people looking to buy one TV each, there’s a problem. Things are not going well for Yellow/Roadway and the freight world seems to be holding its breath that Yellow/Roadway collapses. It would potentially reverse the situation turning it from a shipper’s market into a carrier’s market. But the short version of this entire thing is that I’m working 45 hours per week and as I’m salaried, I get paid the same as when I was working 40.

That all leads us to last Friday. My company had a wage freeze in place since January 2008. That was lifted in April of this year. Whereas our old standard cap was a 3% raise, the new cap became 2%. On Friday my friend in another department emailed me to say that it was a good thing he got the 2% increase, because he was just told that he got hit with a 3% decrease until February. Figuring such a thing might be headed my way, I calculated what a 3% reduction would mean to me. Roughly it would mean maybe I go out once or twice less per pay period or buy Cadet Crunch instead of Captain Crunch. Then my department got called into a meeting.

Ten percent.

Because I’m salaried, or “exempt” my salary is reduced by ten percent until February. My friend is hourly and hourly people received a 3-5% decrease. For salaried people everyone gets 10%, from the highest person to the lowest. The lowest person, by the way, would be me. I was promoted in early 2007, moving from hourly to salaried. When I first heard that I would be salaried I imagined a much larger raise than the one I got. Assuming a 40-hour week my raise amounted to roughly $0.25 per hour. Not exactly “boating on the lake” money. I’ve gotten one raise since then, which is the 2%.

Without getting into the math, which I did on Friday, that leads to a quirk. If I had stayed an hourly employee and not gotten the raise upon promotion, then taken a 3% cut, during this “reduced wage” period I would be making more than I’m going to be making as a salaried employee that took a 10% cut. Simply put I don’t make enough as a salaried employee to be out of the range of the standard hourly employee. But because I’m exempt I take the bigger hit. Even removing my previous hourly wage from the equation, there are hourly people that I made more than before this announcement that I now make less than. And there are people that make more than me, but are taking a smaller cut. How in the world this seemed like a fair strategy is beyond me.

Also there’s this to consider, the difference between the lowest yearly salary of an hourly employee and the highest is probably less than the disparity between my salary and the highest paid salaried employee. I don’t know what minimum wage is, but let’s assume someone here makes six dollars an hour. That works out to $12,480 per year. I don’t know anyone that makes this at our company, but if we assume someone here makes $20 per hour, that’s $41,600 per year. The difference between these two yearly salaries is $29,120. Now, I’m willing to bet I wouldn’t have to search too far up the ladder to find someone above me that makes my salary plus $29,120. In fact I would wager the upper officers make my salary plus $100,000. So why is my salary cut at the same percentage as theirs yet hourly employees are reduced by scale? It makes no sense.

When I complained about this at our meeting, and believe me I complained, I brought up the fact that I would be better off if I had stayed an hourly employee with my old wage, I was told that being a salaried employee has advantages like disability and health insurance. So if I become disabled or dead, I can take advantage of my status. Well, hot dog. I guess the downside is, I’ll be disabled or dead. In other words not really aspects of my perks that I want to take advantage of. I also said in the meeting that we’re eligible for bonuses, “but I don’t see that happening any time soon.” I may have growled that, actually. There’s also a chance that I sarcastically said, “At least there aren’t any major holidays coming up.” That chance by the way is 100 percent. It’s important to point out at this time that I’m not upset with my boss. Clearly this was not his decision, he just had the unfortunate task of being the messenger.

Now back to the fact that I work 45 hours per week. In essence every eight weeks I will have worked a week for free. With my “temporarily” reduced salary I am basically being paid for 36 hours of work per week, or 80% of the time I’m at work. I did all of the math and basically for duration of this reduced salary, I will be making roughly $4 less per hour than my normal wage if I’m working 45 hours per week.

The reduced paychecks will clearly affect me. Whereas under a 3% it would slightly modify things, this will majorly change things. It could mean not going to Florida for Christmas. It could mean that my car will be paid off in March instead of January. I’m ahead on payments so I could skip one or pay it at a lower level without penalty, but it will delay having the car paid off which is something I was looking forward to doing. At the rate I had been paying, I had three payments left. My salary is reduced, allegedly, for three months. Sometimes I think life has a sense of humor. Not a particularly good one, mind you. It will going out less, paying less towards my bills, etc.

But I have to say more than anything, it’s the sense of unfairness that is irritating me. As I told my boss, I’m paid to analyze things, so they had to expect I would analyze this situation. While it’s a shame that anyone has to take a 10% reduction, it’s especially unfair to people at the bottom of the scale that are treated the same as people at the top. If the company sees the need to scale hourly employees with a smaller range of yearly pay, why not scale the salaried employees who have a much larger variance from the top salary to the bottom one? It reminds me of the time I got a raise at my old job and it just barely kicked me up into the next level so that with the new reduction, I was making less than when at a lower wage. Or the fact that because at one point I made $100 more than the lowest end of a scale at the YMCA I had to pay more than $100 extra per year in membership dues.

By the way, another way to put the fact that I’m only paid for 80% of my time at work is to say that every Friday, I’m working completely for free.