My Wife’s Company Ask Her to Take 50% Paycut – What is My Advice?

My wife is working in the MICE industry with mostly international traveling customers. With the pandemic restricting travel, the company is in dire situation since the Covid19 ordeal. Workforce has been cut by more than 50 percent since March. With cash extremely tight, the company is barely keeping afloat by Singapore government’s budget aid. There is a high likelihood that survival may only last a few more months.
Most recently, her company requested all the staffs to work part time and take 50 per cent pay cut. In doing so, all the employees have to sign a new letter of offer. The letter is simple and vague and is to be signed urgently by all employees on 31 May, giving only a few days to consider. Thereafter, employees are also not allowed to take their annual leave for at least the next two months. This is because as told by her company, they are still very busy running backlog businesses with much reduced workforce and reduced workhours.
My wife consulted me on this matter. I told her to resign without much thought. To me, it is a trick by the company to con employees into signing an unfair deal.
The rationale is as follows:
Let’s hypothetically say her gross salary is SGD8,000 a month, with 2 months-notice period.
Her balance of leave is 10 days after pro-rated.
Assuming the company closed down in August,
If she accepted the new offer
Her salary in June and July will be SGD8,000. Her leave of 10 days will be forfeited.
Even if miracle take place, and her company survives until early October, her part time salary in June, July, Aug, and Sep will be SGD16,000.
And also, let’s assume in mid-June she manages to find a new full-time job to start in 1 Aug. Then she will require to give 2 months’ notice to her company. Her new offer letter did not state whether the 2 months’ notice is full time workday or part time workday. Due to the new letter of offer is in 50 percent part time work day mode, the 2 months’ notice period can effectively be a 4 months period. This means if she resigns on 15 June, her last day is until 14 Sep. In the current employers’ job market, how many companies out there will wait 4 months for you to be available.
And to think that her company intentionally only give her a few days to consider without much time to think properly and to clarify all the details before putting ink to paper.

If she resigns 1 June
Base on her original letter of offer, she will serve 2 months’ notice period, and her last day is 31 July. She is still able to utilise her 10 days of leave, which effectively means last working day is 17 July.  This means working for 1.5 months for two full months of salary of SGD16,000.
Therefore, for the same income of SGD16,000,

If she resigns,
·       She just needs to work from 1 June until 17 July (1.5 months)
·       Furthermore, her workload is not so high considering all her colleagues are working part-time
·       She can find a new job with a firm start date 1 Aug.
If she accepts the new offer,
·       She needs to work from 1 June until 30 Sep (4 months). Even if it is part-time but a long dreadful period.
·       It will be very difficult for her to find new job in the next 1 to 2 months and may have to work until Sep, despite taking the painful 50 percent pay cut.
·       What is even worse is that the company is likely to run out of cash and decide to close in August or September, her leave will be forfeited with a much-reduced monthly salary in June and July.
Anyway, my wife has resigned under my influence. This is despite her company and her superior calling her many times to reconsider her decision. She was almost moved and tempted to sign the new offer letter.

I can understand that she soft-hearted by her company’s persuasion. She is also a bit reluctant having worked more than 12 years in the company. But to me, her company is trying to take advantage of the situation. Furthermore, in my opinion, her company and her superior whom I also know are never that good of a career choice.
In the past, I have encouraged her, in her own decision to leave the company. Her role is not very niche and quite versatile in several other industries. Hence, I feel it is not very difficult to find a new job. Anyway, just less than a few days of updating her resume online, she already received several calls for interviews. And these are much bigger and better companies at least on the surface for now.
Even if she cannot find a new job, I will rather her be a house-wife for my many kids. I am pretty confident that my financial is able to support the big household for a long time. I humbly give thanks to my prudence and financial planning in the past 10 years. Above all, I attribute it to my always “prepare for the worst” mindset.
We agree that this is unprecedented times where many people are going to lose their jobs. And to preserve job is top priority. Still, there are company out there who are going to take advantage of you. My advice is NOT to simply sign a new offer of letter accepting reduced benefits without much thought and clarifications.

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20 thoughts on “My Wife’s Company Ask Her to Take 50% Paycut – What is My Advice?

    1. Haiz… yes employees are like fats, 1st layer to trim. That said, small business owners nowadays are also equally "cham" with low margin, difficulty to find staffs, and high fixed costs… Large and strong co will become larger and stronger. The small and weak is fragile and easily eliminated.

  1. It is interesting that you are seeing the situation through such lens. I always thought that keeping a job (even with 50% pay cut) for a year is better than not having a job. But your point is valid that your wife quits now, she will get her 100% for 2 months + leave encashment which worth at least 5 months of work with 50% pay cut…Good luck!

    1. Hi IW,
      🙂 keeping the job is of course important but, but varying individual factors are very subjective too. Will like to clarify that this decision is encircled around my own family n financial situation. If transition to new job is very hard n financial situation is unfavorable, then it’s better to keep the job, while searching. Tks and blessings to u too.

  2. Hi Rolf

    I am in the same situation myself right now so I think I can perhaps throw in my perspective.

    It is extremely difficult to look at this from a "fairness" point of view because if we do, then the likely outcome is it will look like the company is in the higher favorable position than the employee and that one may feel unfairly treated. In such situation, the truth is no one wins.

    For my case, I'm currently on a 30% paycut with doublehatting the role (an equivalent of me resigned in Malaysia). Since we are trying to get back up faster during this phase opening, we were told to double up on our intensity and at times we had to work weekends. Sometimes I am enraged if I were to think of it from a fair or not angle but I guess in this situation, one can look at it from a different lense. Ultimately, if the company gets back up again, then everyone will have their paycut rescinded and we will be on normal again, though not really sure when will that takes.

    For your wife, I think she's in a good position to have that option to take a break or find jobs elsewhere. But I think it's hard to argue on a black and white if any corporate move right now is a fair decision most of the time or not.

    1. I decided not to use Fave app anymore after reading about your plight. Never support such an organisation.

    2. Hi B,

      Thanks for dropping by n ur honesty, which u always has been. My full empathy to u as well. In fact, my wife’s colleagues are working 50% now on paper with 50% pay cut, but almost all of them are working 100% in reality.

      Agrees that no one wins and it’s subjective. But remember we always have a choice!

      In my situation, the worst possible outcome is letting my wife be a housewife n cut existing expenses which I do not mind. 2nd worse choice is to agree on lower pay (which I think is definitely better than the 50% cut) and less hectic job. Also, I am confident based on her experience, she should b able to find alternative jobs. So on that basis, we made this decision together. Husband and wife should agree together and that is powerful.

      For your last point, I agree corporation has the right to put their terms black n white. However a contract is always mutual for both parties and it’s willing offerer and willing acceptor. Everyone has full right to accept or not to accept not under pressure.

      My end of the day, my humble advice is not based on who has the right or not. Instead, my suggestion is that we should not be coerced into a situation to make a hasty decision immediately. Rather we should gives ourselves time or request for some time to consider. Must be strong.

      In addition, I guess it is wise to write the pros and cons down, and base on several diff alternatives. And you should discuss with your closed ones. Then if needed, it will be good to discuss with someone who has better life or career experiences to give you different views. Finally filter and decide with no regrets.

      Best of luck to you my friend.

    3. Thanks Rolf. Your last paragraph came timely. I am also going through a time of deciding on the path to take for my career. May I know if I can share you my situation as I need someone with better life or career experiences? Is there a way to PM you?

    4. Hi Anonymous, I am all ears as u can email me at [email protected] . Not sure if I have better life/career experiences bcos its not so fair if we do not know each other that well. Definitely does not want to give wrong advices / signals.

      Rem to use arbitrary description to protect ur privacy, n I can only advice based on the situation u describe n info u provide base on experiences and opinions.

      But one thing I guarantee is all will be truthful from me, with no devious plans and will try my all best to help as much as possible without causing trouble to yourself.

      Thanks for the entrustment!

  3. Don't need to resign & don't need to sign. The company has no legal basis to force anyone to sign new contract to override original one.

    Sure, company can retrench you. Then you can fight for some benefits. 12 years service nia.

    Even if termination, they will need to give 2 months notice (or 2 months pay in-lieu) & provide documented evidence why e.g. poor performance. Else you can report disguised retrenchment case with MOM.

    1. Agree with you and also as I mentioned to B above. The only added advice is, it is better to part on a good note. I have once in my career where my resignation is not as amiable, and now as I age, I sort of regret.

  4. actually now that your wife is out, she can whistleblow the company to MOM for dubious HR practices.

    1. Havent out yet…. still need to serve 2 full months of notice period less leave days. And still working as hard as before each day.

      It is almost like a typical SG culture of no work life balance in most companies here wherever the HQ is based, US, EU etc. But typically EU companies has more work-life balance.

      Will consider if whistleblow later but maybe by then, the company already folded!

  5. Hi Rolf,

    I think you and your family is fortunate enough to not worried about losing the "bread"

    I remember 2 years ago, when my wife new working environment took a toll on her health, both mental and physical. I told her to resign too, and take time to find another job.

    She lamented that she might not find an equally well paid job anymore. And true enough, even before Covid 19, she is getting like 50 to 70 percent of her last drawn annual pay and now, I just think she is lucky that her company can still offer her some work on reduced pay.

    I am glad that your wife could find another better job, your kindness generated good "karma", but not everything can be counted by dollars and cents and both of us never regretted the switch although she is a bit more careful with her money now.

    Getting by and always telling her that having time to take care of her mum a d our child is priceless, especially if we do not need to take a lifestyle downgrade.

    1. Hi SI,

      I think I know what you mean and you meant well as a friend. Your wording of my family being “fortunate”, I know u perhaps mean “we are currently in a better situation to decide.”

      Hmm.. humans being lament, we understand and we need to give empathy. But eventually after we are done with all letting go of steam, we have to sit down quietly n calmly to think and make daring decisions.

      My first priority of making decision is always base on righteousness and always asking questions. Then, as I mentioned before, husband and wife need to eventually agree together and not half-half. If it is half-half, then better do not decide first.

      Ask : is this decision giving me benefit to me only (self-centreness) at the unfair expense of other good person/people? If this decision help the deserving people who has been treating me fair and well?

      Should we make $ our first priority or if we are able to, we should give family, relative n friends’ relationships, health more priorities? Can losing that few K per month now, in the long term make better relationships and led me to learn to be a better person, a more knowledgeable person, or give me a longer term benefit so that I can also benefit others outside my family?

    2. Hi SI,

      Yes, for what we have done, curses and blessings I do believe. You will have good karma too, as I know you are a genuine and kind person having met before and have many exchanges over the years.

      FYI to rest of readers:

      Literally you cannot say I am fortunate. If u read my “blog tab” “about me”, u know my humble upbringing not even have an HDB flat for my own family with rental 1 room and 2 room flat. Mum not having enough to buy food from market n we live on loans from very kind friends n relatives. My father passed away early with a widow housewife mum with a mere primary 1 education. My wife situation is not as fortunate with loan sharks harassing her house for many years until adulthood, and eventually divorced parents.

      In all honesty, with four kids, two parent-in-laws not working with no income (all dependent on me and wife), and no rich parents, and I also supported 4 other World Vision kids, plus my monthly remittance and overall tens of thousands supporting a few not-wealth-to-do pastoral families in South East Asia, I have heavy expenses. Perhaps one of the heaviest in terms of essential expenses in SG household. Now it is just me with a burden of 10-20 people depending on me.

      In return, no one has ever given me any money or help me with my money burden! But I received joy and many prayers, and in fact, also not as much gratitude as I wanted (that is human nature), but I believe in one thing: The righteous will eventually triumph!!! Yes, eventually!

      Hence, I think we did have to worry about losing bread. And very much so. If you see my monthly expenses, you will be shocked for a simple household and someone who is not-big-business man.

      The lucky part is probably my prudence in my finance and always prepare for the worst mindset.
      My sufferings in the first half of my life helped me to be slightly better situation now. Although still a normal person.

      I was staring with death in sickbed for 2 weeks, n I am always sick for almost 20 years in the past. MY wife was diagnosed with womb tumour as big as 8-9cm during her pregnancy few years ago too. I think I share with u before how she was healed. So that was not easy period for us! MY work is not always good as there were too many politics as I have to deal with too many people from different nations within the companies, and most are only worry about “how to cover their own backside”! Clients are also difficult negotiating to “dry u up” and call to scold you for problems in project that may not be even yours. My wife was working v long hours in her job. Her friend can all testified that during half of the time, her event led to sleeping at 3am and waking up at 5am to travel to event locations.

      All that being said, it toughens us! Being in our jobs and constantly learning new things and willing to make difficult decision seeing the front road further down, and using rear view as lessons and experiences helps us to be slightly luckier.

      And in general, I am positive and optimistic and hopeful. I think that is very important.

      I can say both wife and me came from very poor families. Both never take a single cents from anyone including our parents aside from most basic food.

      But, what I can say is my kids are definitely more fortunate! And that sometimes worry me!


  6. Hi Rolf,

    Pardon me if I rubbed off the wrong way, but u are right, I meant it that way and not belittling or jealous of whatever with your current circumstances.

    Your days will get better and better. 🙂

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