Salary Reduction Letter Due to COVID-19 (Coronavirus)

Salary Reduction Letter Due to COVID-19 (Coronavirus). Due to the global Coronavirus pandemic, many businesses have been forced to temporarily reduce employee wages to avoid closing down or mass layoffs. A salary reduction letter is a document outlying the temporary changes to employment conditions for which an employee will have their salary reduced. The template below can be used to create a customised letter for your business.


What does the reduction of pay mean?
You are able to reduce an employee’s pay if they agree to do so. If you reduce an employee’s pay illegally, you can face up to $12,000 in fines.


What should be included in a salary reduction letter?

  • The reason for the reduction.
  • If the reduction will be temporary or permanent.
  • The current and proposed salary.
  • Contact details of an HR representative to discuss the reduction.
  • An employee agreement section.

What are the reasons for salary reductions?

  • A significant downturn in business operations.
  • Reduced working hours.
  • To avoid layoffs or redundancies.


Is it legal to reduce an employee’s salary?
Yes, a salary reduction is legal, provided the employee agrees to the reduction and the adjusted salary is above minimum wage.


What is a salary reduction agreement?
A salary reduction agreement is a signed agreement whereby an employee agrees to a reduction in pay.


Why Choose HR Expert Australia?
HR Expert Australia is Australia’s most comprehensive online human resource information collection. It is your easy-to-use one-stop solution for professional people management processes, procedures and documentation. HR Expert Australia adds clarity to every aspect of people management, providing people managers with professionally written, fully customisable templates that cover the entire range of Human Resource needs of your business. Are you worried about compliance? HR Expert Australia human resource solutions are designed by HR professionals to be legally compliant and to promote cost-effective best practice. HR Expert Australia human resource solutions take the everyday hassle out of managing your human resources, leaving business owners to focus on what they do best; running their business.