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January 14th, 2009 By | News | Posted In: Media, Community, Financial Crisis

Enquirer: No Pay For You!

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It’s not quite as bad as a pink slip from an unexpected layoff, but the latest action at the troubled Cincinnati Enquirer certainly isn’t good news for its workers.

In a memo distributed today to all non-unionized employees at The Gannet Co., The Enquirer’s parent firm, a top executive announced that workers must take a five-day unpaid furlough from their jobs before the end of March.

“Like others, Gannett has had to make some very difficult decisions over the past year,” stated the memo, written by Robert J. Dickey, Gannett’s U.S. Community Publishing president. “Having to reduce staff, reformat newspapers and end delivery to some customers has had a deep impact on our company and all of us.  We have consulted with many of you on how to minimize the impact on our readers and customers.”

The memo continued, “As a result of your feedback, and in an effort to minimize the need for more layoffs, I have decided to take another approach as we enter 2009. To that end, every non-represented employee in the USCP division will be furloughed for five business days during this quarter. That includes me, your publisher, everyone. Unions will be asked to accept furloughs in lieu of layoffs. We all will be sharing the financial hardship.”

Although Dickey states in a separate “Frequently Asked Questions” e-mail sent to employees that all non-union employees will participate, including executives, he does allow leeway for some exceptions.

“Certain essential employees will be granted exceptions as a group,” Dickey wrote. “Also, there will be exceptions for newly hired employees and for other individuals and units who are impacted by other expense reduction measures.”

The troubled U.S. economy has hit the newspaper industry particularly hard, and Gannett forced a round of layoffs at the end of 2008.

Although the number of layoffs at The Enquirer wasn’t disclosed, at least 30 people — including 13 in the newsroom — were let go, sources say. Those departures are in addition to the voluntary severance packages The Enquirer’s management approved for 60 staffers from various departments in September, including 15 from the newsroom.

The FAQ e-mail didn’t rule out more layoffs, listing the following statement as a response to “Can I take a pay cut instead?”

“Pay cuts, salary freezes and reduced work weeks are other methods of reducing costs that have been considered and may be considered in the future,” the e-mail stated.

Below is the text of Gannett's FAQ e-mail to employees.

Q. Why has the company decided to do furloughs? 
A. Experts are forecasting continued economic weakness for many months to come. While we need to continue to reduce expenses to ensure the overall health of the company, we also need to continue our operations and deliver for our customers. Several alternatives to layoffs have been proposed, but the one that seemed the fairest and the least damaging to our operations at this time was a furlough program. We hope it will minimize the need for layoffs and give us more time to monitor and assess the economic trends and realities.

Q.  Is everyone going to participate?
A. All levels of employees in all divisions in the U.S. and the corporate staff will participate to some degree, depending on a variety of factors. That includes U.S. Community Publishing, which is beginning its program immediately; USA Today, Broadcast and Digital. Union represented employees will be asked to participate in lieu of layoffs. Top executives in the company are participating. Newsquest is taking other expense reduction measures at this time.

Q.  This is a financial hardship for me. Can there be an exception for me?
A.  There will be no individual hardship exceptions. We encourage all employees to make use of resources such as the Employee Assistance Program (See question, “What other resources do I have…”).  

Q. Will there be any exceptions at all?
A. Certain essential employees will be granted exceptions as a group. Also, there will be exceptions for newly hired employees and for other individuals and units who are impacted by other expense reduction measures. 

Q.  How much money is the company saving by doing this?
A. Each unit has been asked to supply an estimate of the savings. A final number is not available at this time.

Q.  Won't this compromise our ability to do our jobs, produce our products and satisfy our customers? 
A. We think doing another round of layoffs at this time would impact our operations more. Furloughs, while a scheduling challenge, provide more flexibility for our businesses and provide more value for our customers.

Q. Why does this have to be done in the first quarter?  Couldn't we have more notice?
A. The first quarter for most of our operations is comparatively quiet and the volume is less. Plus, economists believe the first half will be the most difficult. Action needs to be taken now to continue to bring costs in line with revenues for the first quarter. Waiting until later in the year may magnify the problem and result in more stringent action.

Q. Does this mean there won’t be any layoffs this year?
A. The goal is to reduce the need for layoffs, but that decision entirely rests on what happens with revenues during the rest of the year. No final decision has been or will be made at this time.

Q.  Does this mean the company is in really bad shape? 
A. Not at all. This means we are taking action to avoid the plight of some other companies and industries. Gannett is a solid company and we want to stay that way. Instituting furloughs at this time is a sound financial move by a sound company that is facing severe economic conditions. 

Q.  Have other companies done this?
A. Many companies outside our industry such as the auto industry routinely use furloughs to cut costs or manage inventory. Some of our peers are doing this or considering furloughs and/or other cost reduction measures at this time.  

Q.  Why can't I take a pay cut instead?
A. Pay cuts, salary freezes and reduced work weeks are other methods of reducing costs that have been considered and may be considered in the future.

Q.  Can I give up a week of vacation instead?
A. No, because vacation days are paid so there is no savings to the company.

Q.  Why are the rules different for hourly and salaried employees?
A. Hourly employees and salaried employees are subject to different rules set by the U.S. Department of Labor. Basically, salaried employees are paid for a week’s worth of work, not in smaller increments.

Q. May hourly workers take furlough time in part-day or hourly increments?
A. At this time, we are asking the furloughs be taken in full day units.

Q. If a salaried employee works while on furlough because of an emergency, can he or she then take a new furlough week later?
A. Every exempt (salaried) employee will need to complete the furlough as one full payroll week. Furloughs need to be scheduled so back-up personnel are available. If that is not possible, the furlough will need to be undone and rescheduled. 

Q. Does the furlough include part-time workers?
A. Yes. The furlough should be based on their scheduled or variable time and should be a week’s work of time.

Q. Can I use part-time people to fill in for furloughed workers?
A. Not if it expands their hours and costs more.

Q. Can a salaried employee work on the weekends?
A. There can be no work done during the payroll week at all so it depends entirely on the employee’s regular schedule and their regular days off. See the chart below, which shows that a pay period is one week long, regardless of how often an employee is paid (weekly, biweekly or monthly).

Q.  How will my furlough be scheduled?
A.  Furloughs will be scheduled so that normal operations can continue without interruption during the furlough period.  You will have an opportunity to discuss your schedule with your supervisor, who ultimately must decide what works best and what you need to do to prepare for your being out.

Q.  Why can’t I do any work while I am out?
A.  There are very specific rules that must be followed.  Federal and state laws require that employees, whether hourly or salaried, must not work while on an unpaid leave.  That includes reading or responding to e-mails, calling or responding to calls from colleagues and being on site at your location at any time during your furlough days.  

Q.  Who will cover my job while I am out? 
A.  You and your supervisor should discuss how your responsibilities will be handled while you are out.  If you have a company e-mail address and/or phone extension, you should leave a message directing people to the employee designated to reply in your absence.

Q. If an employee works while on furlough because of an emergency, will he or she be required to take a new furlough at a later date?
A. Everyone will need to complete the five-day or one payroll week furlough requirement.  If there is an emergency and you need to return to work, a new furlough will be scheduled for a later date.  Your supervisor must approve your return to work in advance.

Q.  What happens to my benefits while I am out on furlough? 
A.  Benefits such as your health and life insurance continue during your furlough. Deductions for your health and optional life insurance coverage will be taken out of your paycheck for any week in which furlough day(s) are taken.  You will continue to earn vacation credit during your furlough.   If you participate in the Gannett 401(k) Savings Plan, no participant contributions and company-matching contribution will be made for the time you are not paid while on furlough.  You are not eligible for a distribution of your pension benefits while you are out on unpaid leave. Garnishments will continue to be taken.

Q.  Am I eligible for state unemployment benefits while I am out on furlough?
A.  Unemployment benefits vary by state.  Some states have waiting periods before unemployment benefits commence; others do not.  You should contact your local unemployment office for more information.

Q.  What other resources do I have to assist me while I am out on furlough?
A.  Your local Employee Assistance Program can provide counseling or direct you to resources in your community to help you and your family through this difficult period.   As a reminder, the Gannett 401(k) Savings Plan provides you with the ability to borrow from your account, provided you are eligible under the terms of the Plan.

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