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Salary Reduction Agreement

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Due to the global pandemic, many companies are facing financial decline, and in order to sustain their business, they have to plan different ways to survive. Just like how employees get bonuses and incentives during the success of the company, they are also likely to get a low salary or reduction in pay.


The relation between an employer and an employee is a legal link and a mutual reliance. So, the need of the hour requires both the parties to cooperate with each other and sustain the business and employment. 


Here is a mail consent template to be used as a salary reduction agreement stating an agreement between a company and its employees.


Subject: Notification of Salary Reduction Due to Covid-19




Dear [Employee Name],


This letter is written to notify you about your salary reduction from [insert amount] per [annum/month/hour] to a new rate of [insert amount] per [annum/month/hour].


As you may know, [Company Name] is in financial difficulty and we will work to resolve it in the future. Until a solution is found, we are obliged to take measures such as reducing employee salaries to avoid any dismissals.


We appreciate your cooperation and dedication towards the company and are happy to clear any queries you may have. Please contact our HR Department [Name and Contact].


If you are willing to participate in the salary reduction proposal, please fill in the details below.


I agree to the above-mentioned proposal of salary reduction on a [temporary/permanent] basis until further notice from [Company Name].






Employee Signature with Date









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