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The impact of the pandemic on our take home pay

Susie Al Qassab, Head of Employment comments on current company announcement regarding pay cuts.

“Since the pandemic many employees have accepted pay cuts to help their companies ride out the economic impact of lockdown. So this kind of ‘working from home tax’ may be something which UK companies look at, on the basis that employees are continuing to make savings on commuting costs. However, pay-cuts are not so easy to implement in the UK where employees generally have greater legal protections than in the US.

Generally speaking, even if there is a general right to amend contractual terms, pay cuts cannot be forced through unilaterally by employers, and employee consent is needed to avoid legal claims for breach, or unlawful deduction from wages or constructive dismissal. That said, recent staff surveys are showing that the majority of staff would be willing to agree a reduction in pay to be able to work from home on a permanent basis.

Other alternatives may be that we don’t see pay increases of the same magnitude as we have seen before so employers find a cost-saving there, or working from home is treated as part of a package of benefits where employees have the choice to take it rather than other valuable benefits.”

Susie advises individuals and businesses on all aspects of employment law and across all sectors including finance, media, retail and education. If you have an issue regarding you pay or any other employment matter call 0808 252 5231 for a confidential conversation. Susie and her team are helping many individuals to understand their rights through these challenging times.