Detailed Question:
The reader's husband has worked at his company for 6.5 years. The company moved the couple to a different state soon after he started; he is the manager of a facility. For three years, he made a $75,000 base with a profit sharing bonus of $40-50,000 for a total of $115-125,000 a year.The business has slowed and downsized. He has made $85,000 a year for three years even though he works just as hard as when he started. The couple filed for personal bankruptcy. The wife wants him to ask for a raise; he is afraid they will fire him if he does. He will blame his wife if he asks for the raise and is fired.
I am sorry that it is difficult for me to provide advice specific to your exact situation. I don’t know your husband's company, their policies, his boss, or your husband. I don’t know their financial situation, the company culture or what he has to be afraid of. Even if I was given the answers to all of this by you, I would have to know myself, first hand, to trust the information. And even then, the answer would be “it depends.”
That said, it is always legitimate to ask for a raise, but there can be consequences. If you have been reading my articles, you know that he has to build a business case for why he deserves a raise.
At the same time, his salary and job probably have equivalent positions across the company; anything he receives will reflect the other jobs and their pay ranges. If his employer is “at will,” they could fire him for any reason, at any time, and sort out the situation in court later if he believed he was discriminated against.
And, the fact that his income is backsliding, because of the loss of a profit sharing bonus, and the fact of your personal bankruptcy, are not part of a business case for why he should receive an increase in pay. Nor, is the fact that he hasn’t had a raise in three years and that he is working as hard as ever. An employer might well argue that he better be working as hard as ever.
That said, most companies, when they are losing money, freeze salary increases and have even been known to downsize salaries based on business interests. I don’t know any companies that give profit sharing, bonuses, or variable pay when there is no profit - the same with a Christmas bonus. In both of these situations, if the bonus or increases were contractually required, they would pay them or renegotiate.
If they are downsizing, they have little money and it would send the wrong message to employees. If they are downsizing, most employees don’t want to be the person rocking the boat and viewed as unsympathetic to the needs of the business, so I am sympathetic to your husband’s concerns, also.
From your email, it sounds as if you made the mistake of counting on bonus money, that was only paid if the company was profitable, as if it were his annual pay. This is always a mistake. His income was $75,000 and, since he has not had an increase in three years, his pay is still $75,000, not $85,000, as stated. I wouldn’t count on anything else.
I do not mean to be unsympathetic; I am very sympathetic to your situation, but those are the facts. The bonus was nice while it was paid, but not to be counted on. When a company is doing well and the bonus is paid consistently, it is easy to get lulled into thinking of it as base pay; many people have done this, but it’s not to be counted on.
I used to shudder, when I worked in a position more involved in day-to-day Human Resources work. The HR Generalist regularly asked me how to answer the requests of mortgage companies and banks for salary information about employees.
Invariably, they asked for base salary and any bonus, commission, or profit sharing dollars the employee was eligible to receive. I can handle this much.
Their next question was impossible: how likely was the company to continue to pay these extra dollars. I never answered; what do they think I have? A crystal ball? But, the question makes clear that the employee's uncertain income was being considered in the loan equation.
If his company is in a downward spiral, I do recommend job searching. You don’t say whether you work, but it might also be time for you to obtain a job, or seek a better job, until your personal financial situation improves.
This site can help him out, as well as mine.
These sites can help with good financial information. Check under personal finance.
Aftermath: My reader wrote back with heartfelt thanks. Her husband is job searching and has lined up an interview at one of the fastest growing companies in their state. Best wishes.
