5 Top Ways Your Paycheck Will Change If the Supreme Court Allows Mass Layoffs
Written by
Angela Mae
Edited by
Angela Corry
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In recent news, it was announced that the Trump Administration’s mass layoff plan — also called a “reduction in force” plan — has once again moved to the Supreme Court for final approval. If it passes, 22 government departments could be affected as thousands of federal employees would be let go from their jobs.
If the Supreme Court allows this mass layoff, it could have a ripple effect across both federal and non-federal employees. Here’s how experts think it might impact workers in the U.S. — and potentially your paycheck.
Some Workers Will Be Cut Without Pay
Recent changes have already impacted employees across the board. For federal workers, there’s a significant increase of those being forced to leave the workforce without severance pay.
“While, initially, many of the federal workers cut from the workforce accepted a voluntary incentive to leave the ranks earlier than they might otherwise have left, there are thousands more who were simply severed without compensation,” said Eric Steffy, Founder and CEO at Federal Solutions Support.
Steffy added that many of those who were severed without pay were employees who were still on probation and contract workers. That said, many of those severed are still eligible for state unemployment benefits as they seek new opportunities in the private sector.
Increased Insecurity Regarding Work and Pay
Mass layoffs in the federal government could have implications regarding job stability and workplace confidence.
“Even for non-federal workers, substantial cuts in the federal workforce can create impacts on job stability, local economic systems, and public confidence,” said Eric Kingsley, Partner at Kingsley Szamet Employment Lawyers. “It is possible that we can witness shrinking consumer spending, increased competition for available jobs, and a general sense of insecurity pervading the job market.”
Increased competition could also lead to more skilled workers vying for jobs with a lower starting salary. This is especially plausible as more federal workers seek private sector opportunities.
Paychecks Could Increase In the Private Sector
The average federal worker earns $106,382 annually. However, federal workers often get paid less than their private sector counterparts.
As per The Federal News Network, there’s a 24.72% wage gap between federal and private sector workers who have jobs where they perform similar duties. Given this, federal employees who get laid off and need to make the switch could see a pay increase.
Greater Workloads, No Overtime
Just because many people would be laid off doesn’t mean everybody would be. After all, someone still needs to perform the tasks at hand.
But even here, there could be the downside of heavier workloads and more responsibilities for those who remain. Some experts believe this could also lead to longer hours, potentially without overtime pay — that’s more work.
“Salaried employees, who are not eligible for overtime pay, may be expected to work longer hours without additional compensation,” said George Carrillo, former Director of Social Determinants of Health for Oregon and current Co-founder & Chief Executive Officer at Hispanic Construction Council. “Hourly workers typically won’t see a pay increase either, since government compensation is fixed within existing budget agreements and union contracts.”
Small Business Employees Could Be Cut Loose
Another potential impact is that on small businesses — both the owners and the employees. As Steffy pointed out, many small businesses work in part based on federal grants and contracts. This has led to some businesses shutting down permanently, while others have laid off some of their employees as a result of canceled contracts.
“This has been painful not only for those business owners who must now weigh whether their work can go forward, but for severed employees now without a paycheck and those downstream who benefited from their services,” Steffy said.
Bottom Line
Mass layoffs on any level are stressful, but they’re not the end of the world.
“One thing is certain, the marketplace will continue to evolve. Federal and non-federal jobs will come and go but the skillset, mindset, and lifetime experience that you bring to the table are needed in multiple venues,” said Steffy.
If you’re stressing about your livelihood, take a moment to calm down. It might help to talk to someone you trust and to make a plan — just in case.
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