WASHINGTON—A group of 13 U.S. Senate Democrats accused Delta Air Lines and JetBlue Airways of exploiting a workaround to the CARES Act’s prohibition on employee pay cuts by reducing hours in lieu of pay rates.
The CARES Act bars airlines receiving federal aid from cutting employee pay rates and benefits through Sept. 30 but does not mention anything about schedule reductions. As a result, carriers including Delta and JetBlue have imposed mandatory time-off on some employees, which the lawmakers described in letters to the two companies as “another form of reducing pay.”
“Your decision to cut employee hours is inconsistent with congressional intent and is a blatant and potentially illegal effort to skirt your requirements to keep workers on payroll, and you should reverse this policy immediately,” wrote the group of 13 senators, including former presidential contenders Bernie Sanders (D-Vermont), Elizabeth Warren (D-Massachusetts) and Kamala Harris (D-California)..
The concerns were first raised by the International Association of Aerospace Workers and Machinists (IAM) in April, which reported that Delta has imposed weekly schedule reductions on its workers, while JetBlue employees have been made to take two weeks of unpaid leave between now and September 30. Both companies have defended their policies, noting that pay rates and benefits have been maintained at pre-pandemic levels.
“A reduction in pay rates would result in employees working their regular schedules for less money. That is not the case here since employees are being paid the same rate while working fewer hours,” a Delta spokesperson said.
“JetBlue’s allocation of payroll support funds under the CARES Act only covers about 76% of what we paid crewmembers during that same time period last year. With little new cash revenue coming into JetBlue, we are taking actions now that will help us preserve jobs when the payroll support funding ends,” a JetBlue representative said.
The outcry over the two airlines’ policies comes after the IAM separately pressured United Airlines to backtrack on a similar proposal earlier this month, which would have forced thousands of frontline workers from full-time to part-time status, equating to a 25% across-the-board pay cut. After a backlash over United’s policy erupted—including condemnations from Capitol Hill and a lawsuit from IAM—the company backed down, opting instead for a voluntary leave of absence program that will allow participants to retain their full-time status and benefits.
The U.S. Treasury Department, tasked with monitoring carriers’ compliance under the CARES Act’s Payroll Support Program, has not directly weighed in on whether airlines are violating their commitments by requiring employees to work less hours. Treasury secretary Steven Mnuchin recently testified during a Senate Commerce Committee hearing that United is in compliance with the program “right now,” but did not directly state whether it had been prior to its about-face on the schedule policy.
