The government’s $900 billion Covid relief bill passed at the end of December included $15 billion to airlines, on top of the $50 billion provisioned to U.S. airlines as part of the original CARES Act.
This was pitched as payroll support, meant to cover the cost of the less than 40,000 people who were furloughed or laid off from U.S. carriers. In exchange for the money airlines have to bring these people back onto payroll through March 31, and pay them retroactively to December 1, 2020. At an annualized cost of over $1 million per job, and not even guaranteeing jobs exist past March, this is the most expensive employment program in history.
Money goes to Delta Air Lines that never laid anyone off and had no plans to do so. That just goes into their kitty. American Airlines will receive about $3.5 billion and is supposed to pay roughly 19,000 employees for 4 months, pocketing the difference for themselves.
American Airlines won’t be bringing employees back right away. Most will be paid not to work. Furloughed flight attendants, for instance, won’t work until at least March and aren’t guaranteed work after March. And only one-third of furloughed flight attendants will work at all.
Not satisfied with keeping roughly four out of every five dollars for themselves out of government ‘payroll support’ American Airlines is trying to avoid paying workers the remaining dollar, too.
- I already covered the ‘opt-in’ furloughed employees have to complete in order to get paid. Anyone who fails to certify their availability to work doesn’t get paid, with American keeping the money.
- They’re taking an even harder-line approach with laid off non-union management and support staff employees.
Non-union employees who were terminated October 1, 2020 or later have a choice to make. They can give up any of the pay due to them under government payroll support – the choice American would prefer – or they can complete a certification:
- “You must be available to return to work on a full-time basis at American if requested to do so at any time through March 31, 2021.” Employees must agree to be available to work any time, at American’s discretion, between now and March 31. They may have moved out of town. They aren’t being told whether American will make them show up or not. And they won’t have jobs after March 31.
- “You must not be employed on a full-time basis with another employer.” Anyone that got another job, American is keeping the money.
Such employment would be inconsistent with your availability to return to work at American and with the purpose of PSP2 to provide pay and benefits to individuals involuntarily separated from their employer and accordingly no longer receiving pay and benefits. PSP2 does not intend to provide redundant pay and benefits. If you become fully employed at any point before March 31, 2021, you must notify American so that we can discontinue the relief you are receiving from American pursuant to PSP2.
It’s priceless that American argues workers shouldn’t get the money because of the intent of government payroll support which (if you listen to the airlines, including American) wasn’t to provide a subsidy to the carriers themselves.
And by the way anyone that fails to complete the certification either way by January 27 is assumed to be forfeiting the money to American’s coffers.
American Airlines was given a gift by taxpayers of more than $2.5 billion, and the only requirement was they’d have to also pass some money onto employees that they let go. That, it seems, was too much to ask.