How to Handle a Pay Cut

Perhaps you've noticed that business has slowed down around your office. Or maybe you don't get any warning that your company has fallen on tough times.

The good news, you learn, is that you still have a job. But before you can say, "Whew," you learn the bad news: Your salary is being reduced.

Make No Accept-ion

When your supervisor breaks the news to you about your pay cut, do not accept anything immediately. In other words, refrain from conveying any type of agreement, either verbally or in writing. If pushed, you may say something to the effect of "This is a lot to process right now. I need to think about this and discuss it with my family this evening."

What you want to do is buy yourself some time. Why? You need to find out all the facts surrounding a salary reduction before you accept it. A pay cut can affect your future severance package and compensation for unused sick or vacation days as those numbers are usually calculated based on your current salary -- as are unemployment benefits. Also, the reduced compensation could affect salary negotiations with future employers as your last salary of record could be significantly less than what you are really worth.

ust the Facts

Once you're no longer reeling from the shock, go on a fact-finding mission. Questions to ask your superiors include:

• Is this a mandatory or voluntary pay cut?
• How much will your pay be lowered by?
• Who else is affected by the pay cut?
• How long will the pay cut last?
• Could there be retroactive reimbursement?
• How will this affect raises, bonuses and benefits?
• Are you going to have to work longer hours or take on additional tasks?
• What are the company's plans to turn things around?

Questions to ask yourself include:

• How much do you need this job?
• Do you have faith that the company will recover from this setback?
• Can you trust what your superiors are telling you?
• Is it time to move on?

After gathering information outwardly and inwardly, you may want to speak with an employment attorney to explore all of your legal options and your rights.

It Pays to Negotiate

Once you know the facts and think you may wish to continue at your current job, see if you can negotiate to make the pay cut more palatable to you.

Some areas to negotiate can include your weekly hours and where you work. Suggest a reduced schedule, such as a four-day workweek. Or try to arrange to telecommute to reduce your commuting costs.

You can also negotiate around stock options, if you still believe the company is viable -- and valuable. If you don't have any stock options, ask for some. If you have some, try to get more. If you're not sure what the shares are worth and where the company is headed, do some research.

Finally, ask the company for a written agreement around the salary cut, when your old pay rate might be reinstated and if there will be any recompense for lost wages. Your supervisor may balk, but if you work for a small company, you may be able to negotiate this.

Exit Stage Left

If at the end of your fact finding and negotiating you feel cornered, remember: you're not. You still have choices and options. However, to exercise any of them, you may need to consult with an employment attorney or your local unemployment office.

Because most people are employed at-will, you or your employer can end the arrangement at any time and your salary can be lowered, as long as it is done for a legitimate business reason. But, if your pay has been cut by an unreasonable percentage, you may be able to quit and still collect unemployment benefits. Rules vary from state to state; check with your local unemployment office before you do anything.

If you have an employment contract, you may be able to refuse the cut altogether or at least quit and collect unemployment, but only if the contract states terms of compensation and says that your employer cannot alter the terms without your consent. The pay cut could constitute a breach of contract and an attorney can help you negotiate the terms of your release or fight for your full pay.

Finally, you can temporarily agree to the pay cut, update your resume and upload it. Begin applying for new jobs immediately and look forward to the future with a different employer.

How to Cut Your Commuting Costs

Unless you're lucky -- or smart -- enough to live down the street from your employer's offices, commuting is probably part of your workday. And if that's the case, the sharp spike in fuel prices is probably having an impact on your budget (and mood). According to a recent survey by Robert Half International, 4 out of 10 workers surveyed admitted that high gas prices have affected their commute habits.

What can you do to ease the bite commuting is taking out of your budget? Read on for simple suggestions.

1. All Aboard!

More than a fifth of respondents to Robert Half's survey said that higher gas prices have prompted them to take public transportation more frequently.

Worried about surrendering a bit of freedom and privacy by stepping out of your car and onto a bus or train? You'll get used to it -- as well as the savings you'll enjoy each day. According to Newsday, ridership on the Long Island Rail Road, the nation's busiest commuter railroad, increased by a staggering up 10.4% in April over the same month a year ago, and "the number of drivers using bridges and tunnels in the New York metropolitan area is down."

Use the time you spend not driving to catch up on your reading or sneak in a bit of extra work. Or take a catnap if you can to help you feel refreshed when you get to or home from the office.

2. Everybody in the Pool!

Carpooling, or ridesharing, seemed to have its heyday in the 1970s when high gas prices and a failing economy plagued the United States. Its popularity waned with recovery, but the practice is staging a comeback. Almost half of survey participants told Robert Half International that they were increasing carpooling or ridesharing.

Consider the practice for yourself. It may be hard to commit to carpooling every day, but doing so a few times a week could considerably cut your commuting costs, depending on how far you live from where you work. If you can't easily find a coworker to share rides with, the leading carpool and ridesharing website, which has reported a significant increase in site visitors and listings in the past few months. You may be able to find a ride-sharing buddy within a few blocks of your office.

3. Go Green

Want to burn calories, not gas? Get in shape while you save at the pump by biking to work! An impressive 18% of respondents reported to Robert Half that they were now walking or biking to work because of sticker shock over fuel prices.

According to CBN News, about one out of every 200 people bike to work in the U.S., a number that is certain to increase dramatically if gas prices continue to climb. In fact, the San Francisco Coalition's Bike to Work Day in 2008 saw a 31% increase in participants over the previous year, with twice as many bicycles as cars on the city's popular thoroughfare, Market Street.

4. Dial It In.

Many but not all U.S. companies have telecommuting policies in place. Some folks who can telecommute choose not to. It may be because people are afraid that a lack of face time will negatively impact their climb up the corporate ladder. But you don't have to telecommute every day to save money and help the environment.

Higher commuting costs are influencing the people Robert Half polled, with 33% revealing that they were telecommuting more frequently. Work from home once in a while to save at the pump -- and focus on productivity rather than face time.If none of these options are in place for you at your company, speak with your boss about helping to ease costs.