Will Pax River PAE Applied Technologies Employees Face Pay Cuts?

PAE Applied Technologies LLC has notified the Maryland DLLR that 105 of its employees at PAX River will be laid off because its contract there will end February 24th.  The filing indicates that most of these employees are likely to be hired by the new contractor.  This could still be bad news for those working on the Air Vehicle Modification Instrumentation contract.  Since we handle bankruptcy cases in Lexington Park and throughout Southern Maryland we have repeatedly seen the contractor with the winning bid come in and offer the employees of the old contractor their old jobs back at a thirty to fifty percent cut in pay.  This vicious cycle is likely to continue until the unemployment rate declines.  The new contractor is able to submit the lower bid because they are confident the employees will have no alternative but to accept the pay cut.  

What is the employee supposed to do in this situation?  When faced with choosing between unemployment and a big pay cut it probably makes sense to take the pay cut.  The job market is just too tough to pass on the job.  Even if you plan to find another job you will be much better off being employed while searching for that next job.  We have seen too many people who have seen their unemployment benefits runout before they find a job.  It is no longer unusual for us to talk to someone who has been out of work for over 2 or even 3 years.  

Few people facing such a pay cut will be able to absorb such a pay cut and keep up with there bills.  Many contractors were furloughed during the government shutdown, and they didn’t get back pay.  If this ate up their savings many of them will be facing serious financial problems.  Many of these people will be spending the weekend trying to figure out how to cut their expenses to deal with the likely decrease in pay.  However cutting expenses by over 25% is not likely a realistic option.  This may force many to have to reorganize their finances completely.  Some may be need to seek help from a nonprofit like Consumer Credit Counseling http://www.cccs-inc.org/

to work out reduced payments for credit cards.  Some may bring in a renter or seek a loan modification from their mortgage company.  One option that they should consider, even though they don’t want to even think about it, is bankruptcy.  A Chapter 13 bankruptcy plan can help someone deal with their debt over a five year period even if they are not able to pay that debt in full.  All to often we have met with a client who could have avoided bankruptcy or saved their house if they had come to us sooner.   Even if someone facing this situation has no intention of filing for bankruptcy we offer a free consultation to review their situation and discuss their plan for dealing with a pay cut. 

Discover what you need to know about Bankruptcy in Maryland. Click here to see our Free Legal Consumer Guide to Bankruptcy and get answer to your questions today.

Know your options. Be informed. Protect yourself.


About Southern Maryland Law


Andrews, Bongar, Gormley & Clagett is one of the oldest and largest law firms in Southern Maryland. We have been serving clients here for over 50 years. We have more attorneys and a larger staff than most other local law firms, so we can handle a wider variety of legal matters. Each attorney concentrates his or her practice in a few key areas, so you can be assured of the expertise you need.


But we are not so big that we forget about personal service! Your legal matter is unique, and requires a personalized approach. We will always remember that. If you have a legal issue, contact us today to schedule your consultation.