Accounting, Payroll & Pension Issues/Accounting basics as they relate to layoffs
Expert: Ed McFarland - 1/8/2006
QuestionHelp! I think that I'm going through some weird irrational guilty phase here. I make about $45,000 annually working for a company that did about $35 million in total revenue last year. Lately, I've figured that I might actually be able to do my job in half the time. Forgetting about the relevance or accuracy of that conclusion for the moment, please tell me that by keeping the half of my salary that I could theoretically "give back" (say $22,500), I'm not inadvertantly costing some part-time employee his job (in other words, the company looks at the books, sees that they're about $20,000 short from where they want to be, and decide, "Okay, let's just fire so-and-so Smith - that'll save the $20,000. Problem solved"). I know that for some reason, it's probably ridiculous to think about a $35 million company managing their finances like that, but I can't say conclusively why! And that little voice keeps saying, "Well, that 20 grand MIGHT cost someone his job - you never know." Thank you!
AnswerNo, labor doesn't work that way.
Other factors such as education and experience and productivity make up the mix as well. You giving back the difference wouldn't figure in the calculation. It would just add to the bottom line. If the part timer was considered surplus, he'd go regardless.
Relax