Employers putting the squeeze on workers

Eve Tahmincioglu • Profile • E-mail

“Sorry to gouge you, working stiff. Blame the recession.”

More employers are using the recession as an excuse to roll back employee benefits, force unpaid time off or fire workers.

“This is the worst I’ve ever seen it,” said Lewis Maltby, president of the National Workrights Institute, about the number of employers “squeezing” employees in the name of a bad economy.

“Employers in financial trouble are tightening their belts and squeezing employees,” he said. “In other cases, profitable employers are taking advantage of a dismal job market to squeeze workers harder.”

Employers are increasingly looking to employees, a major item on the expense column, as a way to shore up profits. Clearly, some choose to lay off workers: The unemployment rate last month hit 8.5 percent, with 663,000 jobs lost.

And for those left behind, it seems like a death by a million cuts.

Cost-cutting measures
In the last six months, 15 percent of employers implemented salary reductions, without a requisite reduction in hours, according to a recent poll by the Society for Human Resource Management. The survey also found that 24 percent were likely to do the same in the next half of the year.

That’s on top of other cuts already made in the last six months. The study found:

• 78 percent of surveyed employers reduced employee health care coverage and 22 percent froze employee health care coverage.
• 72 percent reduced, 24 percent froze and 3 percent completely eliminated health care coverage for spouses/dependents.
• 47 percent reduced, 32 percent froze and 21 percent completely eliminated an employer match in a defined contribution retirement savings plan.
• 44 percent reduced paid time off.

The fear of losing a job is making many workers more accepting of a host of cost-cutting measures in the workplace.

Over the past three months, an increasing number of workers “have warmed to salary cuts, unpaid leave and lost vacation” rather than lose their pay check, according to a survey by career Web site Glassdoor.com.

• 40 percent are now willing to take a pay cut, compared to 30 percent last quarter.
• 34 percent are willing to take unpaid leave, compared to 24 percent during the same period.

Even though employees are the ones who generate profits for a company, some firms are more concerned about declining share prices in the near term than holding on to employees, said Kathy McKee, professor of labor law at Regent University. But the practice ends up hurting morale and the company in the long term, she added.

Some firms also are taking advantage of the recession to hard bargain with employees, she said, and that creates a lose-lose situation for workers.

“The reality is, in some ways, it’s a buyer’s market for employers,” McKee said. “And workers are frightened because they hear how people are out there looking more than a year for the next job.”

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