In fact the threshold is 15% pay cut in my jurisdiction per statute.
Interesting; that makes a lot of what's happened in our company in the past come into better focus. We had a 10% across-the-board pay-cut combined with a years-long hiring freeze, resulting (as staffers left) in a decrease in headcount to do the same job, overburdening the rest of us to cover the gaps. I suspect that that 10% would have been higher if the law allowed, eh?
It is also interesting that workload doesn't factor into the legal equation.
We've since been (mostly) acquired, and so the pay-cut has been reversed, and we've since received one 3% COL increase a couple of years back, the first in over ten years. So even with the reversal of the pay-cut and the 3% increase, we're all earning about 16% less than ten years ago when adjusted for inflation.
What's the message we received? "We have directed us all down a dead-end, which has made the skills and special knowledge you've gained over the last ten years worthless to anyone outside these four walls, and so we know we have you by the balls because no one else will hire you at anything close to a reasonable salary anymore."
They're trying (this week, incidentally) to change the rules for the sale staff, trying to hold them to account now against today's higher standards for performance, tripling quotas (from what I've heard) and requiring account managers to adhere to a brand new set of engagement standards. We'll see how that goes. It's actually Phase II of their efforts to recover from the damage they did over the last ten years to the sales group. What I found interesting is that both times they announced the big changes they're imposing, our top sales person left the company precipitously.
They haven't gotten to operations staff yet. They're so far entrenched in this dead-end they led us all down that I'm really not sure what they could do. If I was Montgomery Burns from the Simpsons, I would just ditch the whole product line. But they cannot do that. They've got hundreds of customers who have built their business around what we offer them, and we were acquired by a company with a long-standing, public commitment to never leave a customer high-and-dry. So I translate that into some measure of safety for the operations staff, though you can be sure that once they get around to it they're going to find a way to replace what we do with something better, and move existing customers to that new thing. Of course, to get there, they're going to need us, since we're the only experts on what's out there now.
As I mentioned in the recent "coasting" thread, I've, perhaps foolishly, interpolated that into some measure of comfort that I'll be able to do a good job for customers for perhaps as many as another six years before they truly don't need me anymore. Not all the way to retirement, but more than half-way there. So I will have a decision to make: Do I take brewer12345's approach, and take my chances that someone out there will pick me up despite my skills being so badly out-of-date/arcane now? Or do I try to find a way to have this company agree to carry me along another five or six years after their new offering (whatever that may end up being) is available - obviously in some other capacity?
Anyway, this is a rather long-winded way of saying that I don't think you can look at situations like this in the way we did twenty years ago: It isn't necessarily a mistake, or foolishness on the part of the company. It's opportunistic. It's mildly exploitative, but might be a reasonable gamble. Sometimes, there simply isn't enough money to do the right thing, and no requirement that employers go out of business when their financial situation is dire. Let's not forget that taking a job is making an investment, for many employees. Not everyone is sanguine about jumping from job to job. Not everyone enjoys having to sell themselves every few years, and really, continually every day. Sometimes the best approach really is to grin and bear it, fully cognizant that you've made unfortunate choices and have to live with the consequences if you aren't willing to climb up onto the surfboard.
