Select Page

An Early Version of the CARES Act Prevented Airlines From Reducing Workers From Full-time to Part-Time

The CARES Act provided subsidies to airlines, on the condition that they not furlough workers, or reduce their rates of pay through September 30. However, the statute as enacted has a significant loophole. Gary Leff from View from the Wing explains:

Now United has realized they can switch employees from full time to part time and pay them less. That’s not a furlough, and while it reduces pay it does this through reduced hours not reduced pay rate.

In other words, the federal government has paid United Airlines on the assumption that their employees would work 40 hours per week. But United is only paying their employees for working 30 hours a week. United is pocketing the difference.

The International Association of Machinists and Aerospace Workers union has threatened to sue:

“IAM District 141, consequently, advised United management that we are prepared to sue them in federal court if they take this action because we believe that any type of furlough or reduction in pay and/or benefits before September 30, 2020, is a violation of the CARES Act.

American Airlines CEO Doug Parker has complained that United is violating the CARES Act:

“Some airlines think it is OK to go and cut employees’ hours,” Parker said, according to notes and recollections from two people who listened to the meeting but asked not to be named.

“One [airline] is cutting full-time from 40 hours to 30, a 25% cut in pay,” Parker said. “I was there when we were working on CARES and that wasn’t the intent or meaning of it.

Parker is right, in part. An early House version of the CARES Act would have ensured that airline workers would be paid 100% of their wages:

But that text was stripped from the final version of the bill. The CARES Act, as enacted, leaves this loophole wide open. There is no restriction on reducing hours, so long as the hourly-wage remains the same.

Leff writes:

My sense though is that the airline bailout language, pushed so hard and so quickly by industry lobbyists with the public pleading of unions wasn’t well enough drafted – although from the perspective of those advocating the language this was a feature, not a bug.

Welcome to the world of rent seeking and legislative history, Mr. Parker.

Disclosure: I have United elite status which, at the moment, is basically worthless.

 

 


This post has been republished with permission from a publicly-available RSS feed found on Reason. The views expressed by the original author(s) do not necessarily reflect the opinions or views of The Libertarian Hub, its owners or administrators. Any images included in the original article belong to and are the sole responsibility of the original author/website. The Libertarian Hub makes no claims of ownership of any imported photos/images and shall not be held liable for any unintended copyright infringement. Submit a DCMA takedown request.

-> Click Here to Read the Original Article <-

About The Author

Josh Blackman

Founded in 1968, Reason is the magazine of free minds and free markets. We produce hard-hitting independent journalism on civil liberties, politics, technology, culture, policy, and commerce. Reason exists outside of the left/right echo chamber. Our goal is to deliver fresh, unbiased information and insights to our readers, viewers, and listeners every day. Visit https://reason.com

Leave a reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Welcome

Bringing together a variety of news and information from some of today’s most important libertarian thought leaders. All feeds are checked and refreshed every hour and pages auto-refresh every 15 minutes. External images are deleted after 30 days.

Time since last refresh: 0 second

Publish Your Own Article

Follow The Libertarian Hub

 

Support Our Work

Support the Libertarian Hub by tipping with Bitcoin!

Send BTC:
19PU2K7448gKxAvisR5cF6X5RquYfWu5vZ

Weekly Newsletter

Newsletter Signup

Subscribe to our newsletter to receive a weekly email report of the top five most popular articles on the Libertarian Hub!

Weekly Newsletter SignupTop 5 Stories of the Week

Subscribe to our newsletter to receive a weekly email report of the top five most popular articles on the Libertarian Hub!