If I Refuse a 20 Percent Pay Cut, Is it a Resignation or Termination?

by Evil HR Lady on September 16, 2020

I would appreciate some advice for my particular case.  My company recently got bought out by a big corporate company. Today I got an offer letter that offers a 20% pay cut and that would increase my benefit premiums from $0 to $200/month, all for the exact same role and tasks. 

As you can imagine, I am not happy about it. And it was a bigger slap in the face when the HR person from the new company didn’t even know I existed (I work remotely, while 90% of the company is in another city). 

I’ve sent an email to the HR team at my current company inquiring if this was just an oversight but haven’t heard back from them. The CEO did say in a slack room for questions of employees that anyone who will not take their offer from the new merged company can just resign…

If I don’t accept that offer letter, or they can’t justify this pay decrease, and if I don’t “officially” resign, does this just mean the company can terminate me at the close of the merger? 

A couple of things: I wouldn’t take it as a slap in the face that the new HR department didn’t know you exist. They know enough to get you a new offer letter. When you’re merging with another company–no matter the size–the new HR department won’t instantly know everything.

Second, I love email and text messaging and any way of communicating that doesn’t require speaking on the phone. But, it’s also easier for those things to get missed. Pick up the phone and call.

If all employees received a 20 percent pay cut, they will be super tired of answering questions, but that’s the job.

Then to get to your real question: what happens if you just say no? Well, as you said, you’ll be terminated. They’ve offered you a job, they’ve given you written notice, and you can say yes or no. But, the real question is, will you be eligible for unemployment if you say no.

It’s not like you can do a tricky thing where you just fail to accept and they terminate and now it’s a layoff rather than a resignation and you are eligible for unemployment! They will (undoubtedly) report to the unemployment office that you resigned.

Your state may consider a pay cut of 20 percent to be severe enough to count as a legitimate reason for resigning. I don’t know.

But, keep in mind that the federal subsidy is gone and so your unemployment check will be less than your current salary minus 20 percent, plus you’ll have to pay for COBRA.

My advice? Immediately start looking for a new job and as soon as you get one, resign. But in the meantime, keep this one.

Now, if you were actually thinking if you just stay quiet, will they forget to lower your salary? No, they won’t. That’s happening.

And i’m sorry. That sucks.

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