One of the most common forms of disciplinary action taken against public safety employees is a reduction in pay for a period of months.
Generally this reduction will take the form of a 5 or 10 percent reduction for however many months are imposed. There are both some key pros and cons to this type of disciplinary action. Generally, a 5% reduction in pay is roughly equivalent to a 1 day suspension without pay. Some employer’s feel they are cutting their employee’s a break by giving them a 5% reduction in pay for 1 month, rather than a “day on the beach” as it minimizes the financial impact in a single pay period. While this is likely true, there is a mixed motive here since by imposing a pay reduction instead of a straight suspension, the employer still realizes the benefit of having you at work and doing your job, but still gets to take its “pound of flesh” from your paycheck.
One thing you need to consider however is that many employers will accomplish a 5% reduction in pay by temporarily demoting your pay step within your current classification. They do this because most pay steps are also roughly equivalent to 5% and it works with their accounting software. What you need to be careful of however is that if you are reduced a pay step, then your hourly rate is temporarily reduced as well. This in turn will impact how your overtime rate is calculated, your shift differentials and anything else that is based on your pay step. For someone that doesn’t work a lot of overtime this may not be that important, however if you have a long disciplinary suspension over many months, then the reduced hourly rate could result in a far greater financial loss to you than the actual discipline imposed.
Some employers also have policies which prohibit employees from working overtime during a disciplinary suspension. So if you agree to a 5% reduction in pay for 6 months, rather than a 6 day suspension, you may also be prohibited from working any overtime for the next 6 months. A further consideration is that some employers do not credit you with time towards your seniority during periods of disciplinary action, so the longer the discipline is in place, the more seniority you may lose. In today’s economy, these are critical and important consideration that should be made.
A reduction in pay however is not all negative. It does provide you with the ability to spread out your financial penalty and make it easier on you to “foot the bill” so to speak. Also by taking a reduction in pay you may avoid negative impacts on your insurance benefits. In some cases, a disciplinary suspension for longer than a certain number of days may result in your insurance being cancelled. In those cases, especially if you have significant health concerns or children to cover, having a reduction in pay for an extended period of time may be more important than losing your health benefits.
One thing is clear; accepting a salary reduction can carry with it far more of a “penalty” than you might think. So even if it seems minor, or you are willing to accept the discipline, be sure to carefully consider all of the ramifications of disciplinary reduction in salary before giving up your rights to appeal or negotiate.
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