Rivers Casino salaried staff facing a coronavirus pay cut

When the Rivers Casino Philadelphia reopens after four months of coronavirus lockdown, regular patrons may find a few amenities missing: buffet dining, smoking, and poker, for starters.

Some employees will find a portion of their paychecks missing as well.

Rivers Casino has imposed a pay cut of up to 15% on salaried employees who are preparing for the reopening of the Fishtown casino, formerly known as SugarHouse. The casino has not announced a reopening date, but Pennsylvania regulators said Rivers Casino management was hopeful for a restart next week.

“Despite generating zero revenue since suspending operations on March 15, Rivers Casino Philadelphia fully paid all team members for the first month of the shutdown, plus we’ve continued to pay employee health benefits the entire time,” Jack Horner, a casino spokesperson, said in an email Friday. “Returning salaried personnel are receiving reductions not to exceed 15% with no reduction for hourly workers.”

Pay cuts have become a common tool for employers facing cash crunches in the face of the pandemic recession, experts say.

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About 11% of people who have retained their jobs have seen pay cuts, according to data collected by payroll processor ADP. That’s about twice the rate of pay reductions experienced during the Great Recession of 2008 to 2009, said Nick Bunker, research director at Indeed Hiring Lab.

“There’s a lot of remarkable and frankly bad ways that this recession stands out from previous recessions, and what we’re seeing are pretty elevated rates of wage cuts,” he said.

Employers are making an effort to retain employees rather than lay them off, Bunker said. But the pay cuts also reflect the lack of leverage that the workforce can wield in the face of elevated unemployment rates. The Indeed Hiring Lab, an economic research firm that follows international labor markets, has noted about a 25% reduction in job postings compared to last year’s trends.

About 30% of companies surveyed by research firm Challenger, Gray & Christmas last month said they had cut some pay in response to the pandemic; about half of those were able to avoid layoffs as a result.

“It used to be that companies would do everything they could to avoid cutting pay,” Andrew Challenger, senior vice president of the firm, said in a statement. “Now they try to avoid layoffs, which can hurt morale, lead to survivors’ guilt, and create anxiety, with employees wondering who will be next.”

More than half of survey respondents said pay cuts would last until business conditions improve, and a quarter said they expected pay cuts to remain in place until the end of the year.

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The pay reductions are concentrated among higher-paid employees, labor experts said. Temple University, facing a budget shortfall of more than $40 million, in May implemented 5% pay cuts for about 470 employees who are paid more than $100,000, and 10% cuts for 25 officers, deans, and advisers to the president. Outgoing President Richard M. Englert, who is paid $800,000, took a 20% cut.

But there are some instances of unionized employees agreeing to pay cuts to avoid layoffs. Public teachers and school staff in Ravenna, Mich., this week took a 6.7% pay cut to avoid workforce reductions in the face of expected state funding cuts due to the coronavirus.

Some employers have begun to reverse pay cuts imposed during the first weeks of the coronavirus lockdown.

Consulting giant Aon recently announced that it would repay cuts imposed due to COVID-19, and Dallas-based money-transfer firm MoneyGram reversed the 20% pay cuts for its non-hourly employees imposed in March, according to a regulatory filing.

A. Duie Pyle Inc., the West Chester small freight carrier, has called back all but 34 of the 410 people furloughed in March and this week told employees the company would pay them a total of $2 million to make good on 80% of workers’ losses from a temporary pay cut, and half of a managers’ pay cut. Sales have risen and the company was able to end the pay cuts June 1, two weeks earlier than projected.

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Many casinos around the world ordered furloughs and pay cuts during the lockdown, which has devastated the gaming and hospitality industries by reducing brick-and-mortar traffic to zero. In Pennsylvania, casinos continued to generate some revenue from online gaming.

Rush Street Gaming, which owns the Rivers Casino Philadelphia and three other properties including the Rivers Casino Pittsburgh, announced on April 9 that it would furlough some employees.

The pay cuts will remain in place indefinitely, the company said. “We hope to revisit team member compensation once business levels normalize,” it said in a statement Friday.