jetBlue says it will push ahead with plans to slash the number of paid hours its flight attendants and many other staffers earn despite accusations that the airline might be deliberating evading its CARES Act responsibilities. The New York City-based airline has received nearly $1 billion in federal bailout funds under the condition that workers aren’t involuntarily furloughed and their pay rates aren’t cut but JetBlue insists its plans are in full compliance with the CARES Act.
A group of Democratic Senators led by former Presidential hopefuls Elizabeth Warren and Bernie Sanders have pitted themselves against the airline, demanding in a recently published open letter that JetBlue “not take one penny more of bailout funds unless you are prepared to protect your workers jobs, pay, and benefits”.
“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,” the group of 13 Senators wrote.
“The CARES Act is clear that, as a condition of receiving this assistance, your comapny must “refrain from conducting involuntary furloughs or reducing pay rates and benefits until September 30,” the letter continued.
But rather than reducing hourly pay rates, jetBlue says it is simply and temporarily cutting the working hours of its hourly-paid employees like flight attendants. A similar plan was proposed by United but was quickly withdrawn after a fierce backlash and the threat of legal action.
United insisted its plan was CARES Act compliant despite changing its approach and jetBlue also maintains that its cost-cutting scheme is perfectly legal.
“Coronavirus is driving demand to historic lows and we are flying about 10-15 per cent of our full schedule or about 100 flights per day versus on average 1,000 flights per day,” a spokesperson for jetBlue explained in an emailed statement.
“JetBlue’s allocation of payroll support funds under the CARES Act covers only about 76% of payroll costs during the same six-month same time period last year. With little new cash revenue coming into JetBlue, we need to make payroll support funds last until September 30 so that going into October we can preserve as many jobs as possible, which is consistent with the intent of the CARES Act,” the statement continued.
“Given that our flights in many cities are completely suspended and are significantly reduced in others, there are quite literally no hours for our crewmembers to work in many cases.”
The airline said that health benefits and retirement contributions were protected and that none of its cost-cutting programs was aimed at reducing full-time crewmembers to part-time status.
The Democratic Senators have asked jetBlue to provide further information about its cost-cutting programme such as how many employees are affected by the pay cuts, whether unions have been consulted and if Treasury officials greenlighted jetBlue’s pay reduction plan. jetBlue is yet to respond to these questions.
In a hard-hitting statement, the IAM union said jetBlue had “thumbed their noses at their employees, Congress and American taxpayer” for cutting workers pay, while also taking $935 million bailout funds.
