Company cuts my salary immediately after I sign the offer letter

Question

Today I signed an offer letter with a big company in the US that I was very excited to work for.

Less than two hours after signing the offer, and after I withdrew my application to the other company that had expressed interest in hiring me, the company's internal recruiter, with whom I've been communicating for many weeks, emailed me this:

I'm not sure if we discussed this but I need to let you know that for the first two weeks, you will have a 10% cut in pay.

The recruiter further explained that it's because of temporary pay cuts across the whole company due to COVID-19, which happen to expire 2 weeks into my employment there.

While I have no objection to temporary pay cuts due to COVID-19--and actually think it's a really good way of preventing layoffs--I have a strong objection to their failure to disclose this until after I sign the offer letter. If the recruiter had brought it up earlier, I would have readily accepted the pay cut.

The recruiter's claim to be "not sure if we discussed this" is not credible to me. We certainly did not discuss this. Even if the recruiter was not trying to conceal the pay cut and just forgot to mention it before, the recruiter seems to be dishonest about their mistake now.

Should I raise any objection to the way they handled this? If so, how?

It's not about the money for me, and I don't really care if I have to take the pay cut. I want to make it known that their failure to disclose isn't OK. But, I don't want to get started on the wrong foot at this company or risk losing the offer because I complained.

Answer 1

It seems to me that you recognise the risk of rocking the boat. Do be aware, though, that the signals of saying nothing are not entirely benign.

For example, if you kick up a fuss and you may seem like a troublemaker. If you say nothing then you may seem like a pushover, and find it harder to, say, push for promotion further down the line. Whatever impression you make, it will follow you for your time at the company.

Perhaps you can walk the middle by expressing your disappointment at the unprofessional treatment, but agreeing at the same time to tough it in the trenches a little as your new colleagues are doing.

Answer 2

Just tell them that you will start two weeks later.

Answer 3

Actually, I just re-read the question.

A 10% pay cut for the first two weeks. It's not as bad as I originally thought. My original answer was based on a much longer-lasting pay cut.

Honestly, I don't think this is a battle worth fighting, especially if everyone partook in the same pay cut.

I just find it suspicious that the pay cut is expiring, but that the pandemic hasn't ended yet. Has the financial position of the company/organization improved since the pay cut has been implemented? Did they get a PPP loan? https://www.pppspy.com/ Also, why are they hiring new people now?

Answer 4

To me, it sounds like the recruiter missed the fact that your starting date was within the period of the pay cut due to Corona. This certainly qualifies as special circumstances, so I think it's at least possible this was an honest mistake.

Now what do you hope to achieve by complaining at this point? If you're not looking for the money, what is the outcome you're going for? If that is of concern, I'd suggest editing your question to make it about that, asking for a signing bonus or similar. But you say it's "not about the money for me" - then what is it about?

It seems to me this has a lot of potential to backfire, and little prospect of doing anything good for anyone involved. If you're so happy with the offer, I'd say brush it off. Feel free to inform the recruiter that you can't recall it having been discussed but you're understanding of the need for such a measure, and leave it be.

Don't start your new job with bad blood on either side.

Answer 5

I have had great success in signing negotiations so that's where my POV comes from. Let me get this straight... they made everybody take a 10% pay cut but they spent thousands and thousands of dollars looking for a good hire and they found you but now you're supposed to take a 10% cut that they never mentioned? You would basically be paying for some of your own recruitment. Do not accept this. Tell them that your signing was conditional on them keeping the terms of the agreement so by changing the terms they undid your signing. They need to make things right.

They're also playing good cop, bad cop with you. The hiring manager is the one making the decisions not the recruiter. The recruiter is playing the bad cop role, later on the manager would pretend not to have known what the recruiter was up to. Most likely they planned/were aware of the 10% from day 1 and deliberately kept you in the dark. But, don't accuse them of anything. Just say nope. If they really think you were a good pick they will make things right.

And re-consider your thinking that it's not about the money. If you have an attitude that it's not about the money then what happens in say 3-5 months when they come to you with a sob story about needing to cut your pay by 10 or even 20%? They won't tell you that it's only you and a few other people they think are soft that they're telling that to.

Answer 6

Don't complain about it. Just ask to be exempted from the pay cut, on the basis that your offer letter did not contain anything about it.

You've agreed to what legally amounts to a contract, and an undisclosed pay cut means the other side is not fulfilling the contract in its entirety.

Do not threaten to quit, and definitely don't silently quit. You don't want to launch nukes over what is most likely a failure in communication. Your resume (or possibly background checks) will get a pockmark if you actually do quit right after joining, potentially costing you more. The real leverage you have in this situation is that your manager knows you'll be unhappy with the company if they do nothing and leave this "bad blood". This is worth a lot more than it may seem to.

If it's a really big company, they might not have the ability to just exempt you from the cut. In that case negotiate for some other form of compensation. There is always something the hiring manager can do for you. Extra leave time, priority in picking when to use it, maybe priority in taking a course, anything else, it depends on how strict the company's policies are and what exactly you're interested in.

Don't make it about the money, make it about acknowledging the discrepancy in the terms offered and provided and recompensing you for it. More importantly, you don't seem happy with the situation, and this is about making you feel satisfied, which will have a meaningful effect on your job performance, worth more than this short-term cut.

Most managers at big companies know how it works and will try to help you the way they can. Your direct superiors are the ones most interested in your performance. The way to make things right is to be straight with them and ask for exemption, or for something else that you want, and try to accept any reasonably fair offer to clear the air.

Answer 7

I have two pieces of advice.

1. Don't assume the recruiter is being dishonest with you. You don't know this to be true. It sounds like it's start date dependent and it absolutely could be an honest mistake.
2. Protect yourself. The biggest risk to you is that they could extend the paycuts for who knows how long. Two weeks is not a big deal as you should be thinking long term. But the possibility of an extended paycut is a big deal and you should seek assurances first.

Answer 8

One thing that other answers haven't addressed is that many people are struggling due to working at home while having to potentially simultaneously home school their kids or provide child-care (or care for other family members that previously had care-workers or being under financial stress because their partner got laid off, etc, etc.).

It seems quite possible to me that the recruiter is personally overwhelmed and made an honest mistake.

Answer 9

For me it would be entirely expected that the sum you're discussing with the HR is your regular salary. A pay cut that applies to all employees is a very temporary measure (it's just for two weeks!), so I don't see why it should not apply to you.

Imagine that due to reduced workload, everyone on the team would get a PTO on Friday for the next two weeks. Would you expect this policy to also apply to you, or would you expect to work alone just because you're new?

Sure, it's a pity the HR forgot to mention this pay cut to you, but I don't think it's worth fighting against, unless this is just one of the number of reasons you have.

Answer 10

Put yourself in the company’s shoes. What did they have to lose by disclosing the temporary pay cut in the offer letter? If they did and you were petty enough to turn it down for that reason, they’d have dodged a bullet.

It seems more likely this was an honest mistake that’s embarrassing to the company. Turning the offer down now is not a signal that you’re excessively petty, i.e., they could lose someone they don’t want to lose.

Rather than start off on an adversarial footing, you could take the opportunity to extend grace and show them how reasonable you are.

This is an unpleasant surprise and obviously I would have preferred to have discussed the matter before accepting the offer. However, if you had told me new hires are exempt from the pay cut, I would have insisted on waiving that exemption in solidarity with my new colleagues.

By turning the frame around so that it’s your decision to take the pay cut, you hardly look like a pushover. If anything they owe you one.

Answer 11

With as long as the hiring process can take sometimes, and as many candidates as an employer often looks at, it's completely reasonable that the recruiter might have mentioned this to a few people but not others, or that he might not have even thought it was worth mentioning because the cut was about to expire anyway and he didn't think anyone would be hired before then.

A 10% cut for 2 weeks comes out to a loss of less than 0.4% of your first year's salary. If you're making $100K, (just to pull out a nice, round number to simplify the math,) you'd be losing around $380 before taxes. Frankly, that's not enough money to worry about. Chalk this one up to an honest mistake and enjoy your new job!

Answer 12

It sounds like this is partly an innocent bureacratic error but also partly a slippery slope mind game in terms of honesty and respect. In other words, it can be seen as the company's first move at seeing what kind of dishonesty and disrespect you'll tolerate from them.

How about asking him to send you an updated offer letter to sign, which includes the COVID-related pay cut? To the extent that the error is innocent, this should be easy for him. I think you can say directly that you would be willing to accept the pay cut but it is important to you to have the relevant terms included in the offer letter. The message you want to send is that you're willing to cooperate but you require everything to be handled properly above the table.

Answer 13

I would be cheerful, assume it's a mistake, and propose a solution:

Dear ABC

Thanks for your email of 1/2/3. The cut seems sensible in this climate, but given I hadn't been made aware of it in my offer letter, I propose I receive 90% salary for the first two weeks, but that I start my employment a day later. I hope that way the company saves the money it needs to, and our agreement is maintained.

Kind regards

ASDFQWERTY

Answer 14

What worries me in this question is the implications of you not being told. You went into this position without the knowledge of how Covid had affected the job you were applying for. The pandemic hit a lot of fields hard, but I know facets of the software industry thriving from the changes it forced. Not knowing about this hardship impacted your decision on the healthiness of the company. You say they are a large company, so I can assume that 10% is probably temporary and they will probably reinstate everyone's salaries, but you didn't have the knowledge that that would be a worry under your belt.

In all honesty, I might reach out to the other company. A 10% pay cut for 2 weeks is nothing, that's not the issue here. It's not knowing how the company was dealing with the effects of this pandemic that is the issue.

Answer 15

The recruiter could as well not say anything and let you to learn about the pay cut AFTER signing the contract and maybe even after your first payroll. For some undisclosed reason, he/she does you a favor, saying it before you sign.

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Edit: As pointed out in the comments, the first paragraph is worthless in the context of the US employment practices.

Then again, the HR person is not expected to be defending your best interest.

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IMHO, 10% for two weeks is rather minor in regard to the whole lot of additional expenses related to changing jobs.

Just move on.

Answer 16

There have been a number of excellent answers, and some which seem to be ignoring that this is a very different time from most others.

There are a number of US companies which are making month-by-month, and sometimes week-by-week, decisions about workforce size and compensation. My employer has been doing that as well, so I'm personally experienced with this.

Recruitment and onboarding isn't something which happens immediately. It can take weeks to months from the time you're first recruited until you actually start. In my case, I was approached by a recruiter in late June, and I started in early November. For high-salary employees, that much time isn't at all unheard of. The initial salary offer, after multiple phone interviews and an in-person interview, was extended in mid-September, then all the usual drug tests, background checks, etc.

I share that detail because I don't know how long it took you.

It is very likely that if it took more than a few weeks from the time an initial offer was extended, and then you had background checks and other things before you were given a start date, that the personnel / HR department may not have known there was going to be a reduction in pay or hours.

The key to the current environment is the other company may also have such a thing going on. Just because another employer gave you a salary offer doesn't mean they won't also wind up needing to do a reduction in pay or hours in the near term as well.

Normally this would be a big red flag and a legitimate reason to be upset and withdraw your acceptance. Today it isn't. It's a normal fact of life.