Bd Company Salary

[Christopher]

Let's say you signed an "At will" employment contract. And then lets say the company you work for has a 30% reduction in revenue. Can the company just reduce everyone in the company's salary by 30%? Or do they have to terminate and then rehire each individual? Or is this handled similarly to how a raise is handled?

Employers with at will employees can reduce the salaries of all at will employees prospectively, simply by telling employees that this is what they are going to do starting in the next pay period. Salaries can't be reduced retroactively, because the employee has already earned the wages paid at the higher rate for work previously done (although salaries can be increased retroactively, effectively providing employees who worked in the period of retroactive increased salaries with a bonus).

Of course, everyone must still be paid minimum wage plus legally required overtime pay. And, a 30% salary reduction is likely to cause some employees who previously were exempt from the legal obligation of the employer to pay them overtime pay to be subject to overtime pay laws. In some states, this pay cut may also invalidate non-competition agreements that were previously valid because state law does not allow non-competition agreements there for low salary employees.

As a practical matter, in terms of business management, this is a horrible idea that will probably cause a substantial share of your employees to quit, will lead to behavior that secretly undermines the company by people who remain with the company, and will make a unionization drive much more likely. Economists call this reality "sticky wages". But it is legal to do so.

Firms that want to share a lot of their profits with the employees, but don't want to receive such a negative reaction when their profits are thin, often structure their employee compensation more like a typical Japanese big business, large American law firms, and senior executives in private U.S. businesses. In these employment relationships, a fairly modest share of total compensation paid is paid in the form of a regular salary that employees rely upon when establishing family budgets, but a big annual bonus or retirement plan contribution is paid to employees when and to the extent that the company is profitable enough to make those payments.

The company must pay you the agreed-upon contractual rate for any hours that you already worked, but they are not obligated to continue to pay you the same salary going forward. The company can inform your of your wage reduction, and if you don't like it, you can quit. They of course cannot pay you an illegally low wage, but the minimum wage has nothing to do with what you've been paid previously.

With the provision that a labor contract might specify a particular minimum salary, and there are local, state and federal minimum wage levels which you can't go below, an employer can reduce salaries for employees for future work, but not retroactively for work already done. So this is mostly like a wage-increase.

I have often heard that having multiple job offers on the table at the same time is a great place to be in as it gives you more negotiating power. This seems perfectly reasonable to me, especially in a highly competitive industry (software) where salary negotiation is almost expected.

Now, I have found myself in this situation (three offers on the table). I talked to my current boss (who has been in the loop on my whole job search, company is downsizing) about my plan to take the highest of the offers to the company I want to work at most and ask them to match it. He told me this was a very bad idea, that they would just say no and I'd be forced to take one of the less than ideal jobs. He said if I really want to work at my first choice that much, I should just accept the lower pay.

At this point I have pretty much decided to ignore him and carry on with my original plan. However, I can't get what he said out of the back of my mind. I honestly think the chances of it going as wrong as he says are low, but I also don't want to risk not getting my first choice. The difference in pay isn't huge and my first choice does have better benefits. If given the choice between lower pay at my first choice and higher pay at the other, I would probably choose the former.

So now part of me wants to play it safe and take the lower offer, but I don't want to leave money on the table. I suppose I could just respond with "Can you do $xxx,xxx?" or something, but that doesn't seem like it carries the same weight.

I think that's two separate questions. But before we get to the questions, I think we should clarify that if you receive an offer from an employer you really like, but you feel the offer is low, it's always appropriate to attempt to negotiate something higher. Employers expect that.

A company that likes you enough that they're extending you an offer likely won't be offended to the extent that they withdraw their offer, so in that sense it's not risky. Also, if you've interviewed with that company, you've implicitly made it clear that you're in the middle of a job search, so that employer finding out that you're also interviewing (and receiving offers) elsewhere won't be a surprise, and likely won't be important information for them.

If by "inappropriate" you mean "not effective" then I think the answer is yes, it would be inappropriate. As a hiring manager, I don't really care if you're getting better offers elsewhere. I'm evaluating you, as a candidate, based on what you're worth to me and what value you can bring my employer - not based on some other company's needs or criteria.

Further, a problem with basing your negotiation on another company's offer is that you're inviting this employer to justify their lower salary by comparing offers in other ways. Maybe this employer gives more PTO, or better 401k match, or allows work from home, or flexible hours, or a tech stack you actually want to work on, and so on.

I've watched this offer comparison game play out over and over. At my current employer, there's a competitor in town that (famously) pays high salaries. Some candidates I've extended offers to will point out that they have a higher paying offer from that company. The problem with them doing that as a negotiation tactic is that I can now point out that my employer offers more PTO, a better 401k match, better health insurance, more self-direction in terms of picking your tools and methods (and sometimes even projects), occasional work from home, an actual employee parking lot (instead of paying for your own parking), a fully stocked in-office kitchen, and a much more supportive and positive work environment (which is the polite way of saying: we won't put you on impossible projects and then bully you into working tons of overtime until you burn out, like that other company will).

It's to the point that when candidates mention that employer by name, it almost plays into my favor, since I can quickly focus on the reasons why my environment is better than that competitor's. I'm often happy to negotiate on salary in the offer process, but mentioning another offer doesn't play a significant factor. Even when they don't mention another company by name, it's pretty easy to take the conversation in this same direction of focusing on non-salary reasons why my employer is a great place to work. What I really want as a hiring manager is someone who will be happy and satisfied working at my company, so when offer comparisons happen, I will quickly shift to describing the big picture, rather than just getting worried about meeting some other company's salary. If a candidate is actually driven solely by getting the biggest salary, I will probably lose that candidate, but that may be the best thing for everyone involved, in the end.

A piece of paper saying you're worth $X per year to another company doesn't really help prove any of those points, so at best it's unimportant in terms of how I (as a hiring manager) decide on what salary I should offer you. Ideally, you've touched on these things in your interview, so you don't really need to rehash them, but it can't hurt to mention in summary during your request.

If the difference in pay isn't that much then you should go with your first choice based off of company/workload. It's not all about money, you should pick the best company for you. Based off of work/life balance, vacation, and other benefits as well. Everything comes into play when making a genuine decision that would impact your life. I personally would take smaller pay and a great working environment over the higher salary if I were to just be miserable.

It would be an unusually extreme reaction for an employer that's in the contract negotiation phase to completely withdraw an offer due to a potential hire asking for more (within reason, of course, don't ask for $1M after an offer of $100k). Negotiation is acceptable and expected at this stage, so as long as you don't paint yourself into a corner with an ultimatum ("I will reject your offer unless you give me $Y"), you can ask for more and see what they say. Having other offers is a very concrete representation of your market value, so it can be a useful data point to use as leverage. It's not essentially different from any other salary negotiation process, except now you have the best data possible to back up your own assessment of what you're worth.

In any other salary negotiation process, the company can offer $X and you can counter with $Y, which you can then justify with reasons about your experience or expertise or whatever else. Now you can counter with $Y, while having evidence that the market does, in fact, agree that you are worth $Y. In any negotiation process, it boils down to stating what you want and why you deserve it, and now you have objective evidence of why you deserve it.

I really disagree with the claim (see @dwizum's answer) that discussing the existence of another, higher, offer is "not effective" (though I don't think you should just drop the other firm's offer letter on their desk, but should use it as a powerful negotiating tool).

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