n EVIL HR LADY
DILEMMA OF THE MONTH
CUTTING EMPLOYEE PAY
by Suzanne Lucas
ILLUSTRATION: JOHN CHASE
I
'm a partner in a small business (we have three
partners and seven employees). A few years
ago, we went through rough financial times and
cut everyone's pay, including the partners, by 20
percent. When things improved, we raised the pay
back up. Now, we're in rough financial waters again
and need to do another pay cut — and we'll likely lose
our best employees. Yet the alternative is to go out
of business, putting everyone out of a job. Besides
an angel investor coming in and saving us, is there
anything we can do?
A
22
comstocksmag.com | April 2019
WELL, PRAYING FOR ANGEL INVESTORS
ISN’T THE WORST IDEA, but I lack faith
in this particular area. If you’re not prof-
itable, getting an influx of cash will just
prolong the inevitable unless you make
some very real changes. So, what chang-
es are you going to make?
This is a very important question be-
cause cutting pay didn’t solve the prob-
lems. Previously, you did cut pay the
right way — some businesses make sure
the leadership continues with their high
salaries and bonuses while the worker
bees get their wages slashed, but you cut
pay across the board. As long as every-
one is making at least minimum wage
and is told before the pay cuts occur, it’s
legal. (Remember, California has lots of
local laws regarding minimum wage for
employees, so double check!)
But now you’re looking at cutting
wages again, and it’s doubtful your staff