Coronavirus Update: 04.07.2020- Dansko Business Update

On behalf of Jim Fox:

Dansko Team:

In my email last Monday (March 30), I let you know that Dansko would be “reviewing its current compensation and expense structure to determine appropriate adjustments and deferrals.” Over the last week, we have made some very difficult decisions regarding how to balance our two big picture priorities:

• How can Dansko support employees as best as we can, while also recognizing that we do not have unlimited resources?
• How do we make sure Dansko can weather this storm, and be as prepared as possible for whatever the “new normal” looks like (whenever that is)?

With this framework in mind, Dansko will make certain changes to compensation in an effort to maintain our flexibility given the unprecedented level of economic uncertainty. These changes will take effect April 13, 2020. 

Certain employees, including all members of the Executive Team, will have their pay rates reduced by up to 15% and be subject to additional pay deferrals of up to 20%. These adjustments will result in a 15% - 35% decrease in pay rates for these individuals. All of these changes have been communicated to the affected individuals, so if your manager has not contacted you regarding this change, your pay rate has not been adjusted.

Beginning April 13, 2020, Dansko will temporarily reduce its standard work week for most employees. In the Distribution Center, most employees will be alternating between three days one week and two days the next. The default work week for most other employees will be three days per week. This means that employees subject to the reduced work week will be paid for three days a week (or six days out of a normal ten day pay period.) Employees subject to the reduced work week will need to choose whether to take the balance of the days in the pay period as unpaid or take PTO from their current PTO balance. Please note, there will be exceptions for certain employees that are required to work more than three days in a given week. Your manager will contact you this week regarding your specific schedule and PTO options. This new work week will continue until May 3, 2020, unless extended.

As difficult as the above changes are for those who are able to continue working (in the distribution center on a limited basis or from home) there are several employees who are unable to work under our current status. Effective April 13, Dansko will place these full-time and part-time employees on furlough. Furlough is a type of leave in which the individual remains a Dansko employee but will allow the individual to qualify for unemployment compensation without losing their current benefits from Dansko. Those employees who have been placed on furlough have already been contacted by their manager or HR. While not guaranteed, Dansko’s goal is to be able to be able to bring these employees back to work when business allows. This furlough will be in effect through at least May 3, 2020, and we will evaluate before the end of April.

When these changes take effect on Monday, April 13, Dansko will have provided up to four weeks of full pay for all of its employees since the temporary facility closures started on Monday, March 16. While I am proud that Dansko was able to provide this level of support for its employees, I am obviously disappointed that the extraordinary circumstances of the COVID-19 pandemic have led to our making these difficult decisions.

No employee has been spared some level of sacrifice as we work to ensure Dansko’s sustainability and capacity to provide for its employees well beyond this current crisis. We will strive to answer the questions many of you undoubtedly have as we move through this next phase of temporary closure and limited operations. I appreciate your understanding and support for your fellow Dansko teammates as we navigate these uncertain economic circumstances. Please stay safe, healthy, and optimistic for a better future.

Thank you,

Jim