In Letter to Mnuchin, Cantwell, Brown, Schumer Slam Airlines for Reducing Employee Payrolls, Urge Treasury Department to Issue New Guidance

WASHINGTON, D.C. – Today, U.S. Senators Maria Cantwell (D-WA), the Ranking Member of the Senate Committee on Commerce, Science, and Transportation; Sherrod Brown (D-OH), the Ranking Member of the Senate Committee on Banking, Housing, and Urban Affairs; and Senate Democratic Leader Chuck Schumer (D-NY) sent a letter to Treasury Secretary Steve Mnuchin criticizing announcements by some airlines that received relief funds from the Coronavirus Aid, Relief, and Economic Security (CARES) Act that they will cut employee hours and payrolls and urging him to issue new guidance preventing the cuts.  

The letter comes after Cantwell criticized these policies and called for science-based protections for the traveling public and aviation workers at a Commerce Committee hearing on Wednesday examining the aviation industry during the COVID-19 pandemic.

“As you are aware, Congress’ intent of the Air Carrier Worker Support provisions was to maintain air carriers’ payroll through September 30, 2020, and to prevent layoffs in the airline industry,” the senators wrote in their letter to Mnuchin. “We believe air carriers’ unilateral reduction of workers’ hours is inconsistent with that objective, and we urge you to issue guidance that makes that clear and to require carriers to comply.”

“Specifically, Section 4112 of the CARES Act required you to provide $25 billion to passenger air carriers for the exclusive purpose of continuing payment of employee wages, salaries, and benefits,” the senators continued. “Congress applied several conditions to this payroll support, in addition to its limited application to wages, salaries, and benefits…Combined with limitations on stock buybacks, dividends, and executive compensation, it is clear that Congress intended these provisions to yield maximum benefits to air carriers’ workers.”

In Wednesday’s Commerce Committee hearing, Cantwell expressed her concerns directly to Nicholas Calio, the President and CEO of Airlines for America, and previewed today’s letter: “United [Airlines] backing off of what they were trying to do on forced hour reduction was the right move, and I hope that Jet Blue and Delta are going to do the same things. We’re definitely going to get out of the Treasury the right guidance on this, and clearly we wanted to help protect the payroll of those individuals, so thank you.”

During the hearing, Cantwell also spoke about the importance of continuing to provide benefits, including health care, for aerospace workers. Speaking to Mr. Eric Fanning, President and CEO of Aerospace Industries Association, she said: “If you lose your job in aerospace manufacturing now, and you have…one month of healthcare from your employer under their COBRA system, and then you yourself could purchase another year, or I think it’s 12 months, of that. But do you have the 2,000 dollars or whatever the benefit is to purchase that? If you don’t, you’re going to not hang around and wait for the aerospace job to come back…I wanted to emphasize how critical it is that if we want to retain these workers, and retain them being able to help us again in aerospace, which is a very competitive environment, that we need to do something about healthcare.”

In closing the letter to Secretary Mnuchin, the senators wrote: “We recognize that the airline industry is facing significant challenges at this time, and we are pleased the CARES Act provided payroll support and loans targeted to the sector. It is important that air carriers use this funding to support their workers, not to reduce their payrolls.”

The full letter can be found HERE.