Can they reduce salaries as well as lay off employees?
My employer (located in New York State) is having some financial difficulties. As a result the company is now reducing all salaried employees' pay by 18% for the next 7 weeks as well as shutting down business for one week at the end of the year. This reduction in salary is not the result of a job change or cut in hours. All employees are expected to work the same a before but for less money. Is this legal?
1 answer | asked Mar 15, 2001 8:29 PM [EST] | applies to New York
Answers (1)
Pay cuts and lay offs are legal
The short answer is that the pay cut and temporary lay-off are all legal.
Believe it or not, when you are employed, you and your employer have a contract. The contract may be entirely oral, but it is nonetheless a contract. Unless you and your employer decide to make the contract a contract of definite duration (6 months, 1 year, 5 years, whatever) both you and the employer can change the terms of the employment contract at any time. Because the terms of employment can be changed at any time, at least that is the case in New York State, you are said to be employed at will.
Simply because one side changes the terms of the agreement, the other side does not have to accept it. Thus, if you tell your employer you want more money, the employer does not have to agree. Same with you. If the employer decides to reduce your pay, you don't have to accept it, but, in that case, your choice is to leave. There is no way you can insist that the employer maintain your pay. You can leave at anytime, without even giving notice. But remember, simply because you are legally entitled to leave whenever you want, that does not mean the employer has to like it. You give an employer notice not because you are obligated to do so, but because you want to keep the employer's good will.
Although there is no way for me to tell for sure, I assume that you are a non-union shop. Just for your information, even though you are non-union, you and your fellow employees are entitled to take collective action. In other words, to an extent, employees addressing an employment related concern together have certain protections from termination, etc., on the basis of the collective action, just like union members, even though not actually union members.
I am sorry I can't be of more help.
David M. Lira
posted by David M. Lira | Feb 19, 2001 3:51 PM [EST]
The short answer is that the pay cut and temporary lay-off are all legal.
Believe it or not, when you are employed, you and your employer have a contract. The contract may be entirely oral, but it is nonetheless a contract. Unless you and your employer decide to make the contract a contract of definite duration (6 months, 1 year, 5 years, whatever) both you and the employer can change the terms of the employment contract at any time. Because the terms of employment can be changed at any time, at least that is the case in New York State, you are said to be employed at will.
Simply because one side changes the terms of the agreement, the other side does not have to accept it. Thus, if you tell your employer you want more money, the employer does not have to agree. Same with you. If the employer decides to reduce your pay, you don't have to accept it, but, in that case, your choice is to leave. There is no way you can insist that the employer maintain your pay. You can leave at anytime, without even giving notice. But remember, simply because you are legally entitled to leave whenever you want, that does not mean the employer has to like it. You give an employer notice not because you are obligated to do so, but because you want to keep the employer's good will.
Although there is no way for me to tell for sure, I assume that you are a non-union shop. Just for your information, even though you are non-union, you and your fellow employees are entitled to take collective action. In other words, to an extent, employees addressing an employment related concern together have certain protections from termination, etc., on the basis of the collective action, just like union members, even though not actually union members.
I am sorry I can't be of more help.
David M. Lira
posted by David M. Lira | Feb 19, 2001 3:51 PM [EST]
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