Salary Adjustments During COVID-19: How Do You Calculate Different Pay Percentages for Staff?

Please let me know how to calculate the salary changes due to COVID-19. We need to pay different percentages of salaries to different staff. Could you advise on how to calculate the salary, whether on the gross of an employee, or if deductions can be made on the take-home pay as well?

Salary Structures and COVID-19 Adjustments

Salary structures are locked in once an offer of employment has been made to the prospective candidate. The data is then seeded into respective payroll systems/portals. There is NO way that salary structures should be modified now just to suit business interests and goals. As far as the COVID-19 pandemic is concerned, it really doesn't alter anything, and salary structures are going to be the same as originally agreed with the employees. It is illegal to change the salary structure without the consent of affected employees.

Quick Thoughts

1. Please obtain guidance on new/altered salary disbursement modalities from your local Labor Union office before rolling out any communication to the employees.

2. Please obtain consent from the affected employees on their new/altered salary structures with clear timelines.

3. Please handle grievances in a professional manner when you receive them and ensure closure.

4. Many organizations are resorting to percentage salary cuts these days, and that is happening on the Gross components of salary.

You can actually add a salary component called "Other Deductions" and deduct the payment if it's a deferment. Or, if it's a permanent cut, you can directly do it from the gross salary. However, this will have an adverse impact for a few employees paying PF, who might lose PF slabs because of this. In either case, auditing files have to be submitted.