Chapter 16 - Payroll Accounting

Alcoa to slice 15% off payroll costs at Quebec plants

With the hard hit economy, Alcoa Inc., the largest U.S. aluminum producers, is one of those companies who are having a hard time making a profit due to the drop in prices of lightweight metal. Their Canadian non-union salary employees might be affected by the 15% cut to their payroll so that the company can conserve some cash. Alcoa know that it is “part of managing through the downturn and focusing on cash”. The company needs money in hand to keep the company going because their most recent financial statements have shown a net loss of the company.

This article is related to our chapter 16 about payroll accounting because this article is dealing with the payroll cost to their employees on a regular basis over a period of time. The company’s payroll department needs to consider and go through so many laws and regulations before they actually decrease the wages of their employees. They have a large role to play. Also, the workers are earning a non-union salary which means they should be paid a fixed sum of money, for the salary part, but since it is a non-union salary, the company has the ability to changing their employee’s salary amount.

I believe that Alcoa is a considerate company. At least, they considered only reducing their payroll by 15% and not laying them off or firing them. It is good to know that the employees still have a job so that they have some sort of finance that is supporting them. As we all know, employees are in desperate need in keeping their jobs secure so I believe they wouldn’t mind having a 15% deduction to their salary. I think a 15% decrease to my salary would be horrifying but I would have to accept the fact that I might not even receive a pay check at all.

courtesy of: http://www.nationalpost.com/story.html?id=1353771