Some airlines are cutting employee hours in what critics are calling a workaround of commitments they have made in accepting federal stimulus funds. 

Under the Cares Act, the Treasury Department is providing carriers with a combined $25 billion in payroll grants and low-interest loans, but under the stipulation that airlines not lay off, furlough or reduce pay for employees through Sept 30. 

Some airlines, however, have interpreted hour cuts to not be the equivalent of pay cuts.

United has implemented hour reductions for tens of thousands of employees, president Scott Kirby said during the carrier’s earnings call on May 1. 

The carrier will receive $3.5 billion in Cares Act grants plus $1.5 billion in 10-year loans at 2% interest.

Kirby said the federal aid doesn’t cover the $6.5 billion in payroll expenses United could incur through September. He characterized the cut in working hours as compliant with the bill. 

“We made a promise to our people and to American taxpayers to avoid involuntary furloughs or cuts to pay rates for U.S. employees until the end of September, and that’s a promise we’ll keep,” Kirby said. 

Delta, which will receive $5.4 billion through the Cares Act, had reduced all ground employees to three or four days through June. 

“Consistent with the requirements of the Cares Act, Delta employees continue to be paid at the same rate of pay,” the carrier said in an email. 

JetBlue is having employees in the corporate office as well as specified operational managers and supervisors take 24 days of unpaid time through September. The program doesn’t apply to pilots, cabin crew, the maintenance team or airport ground workers such as gate agents and ramp personnel. JetBlue said the $936 million it is to receive in federal payroll support only covers 76% of its payroll cost though September, based upon 2019 costs. 

“We are taking actions now that will help us preserve jobs when the payroll support funding ends,” the carrier said. 

The maneuvers of United, Delta and JetBlue have drawn the ire of the carriers International Association of Machinists and Aerospace Workers. 

The union says all three carriers have “ignored or circumvented the employment protections contained in the Cares Act.”

Some in Congress agree.

In a letter Friday to United CEO Oscar Munoz, Sen. Josh Hawley (R-Mo.) said that cut in hours is a pay cut. 

“Decisions by major employers like United Airlines can reverberate widely across the labor market, affecting communities and working families alike,” Hawley wrote. “The taxpayers of this country have offered a generous bailout to your company and you should, in turn, honor this trust by keeping the promises you made to those you employ.”


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