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  1. #1
    sparger68 Guest

    Unhappy 33% Reduction in salary. Is this legal?

    What is the name of your state?What is the name of your state?What is the name of your state?What is the name of your state? California

    I have been running a small company for 2 years and I was recently told that if I wanted to keep my job I would have to accept a 33% reduction of my salary. I have no benefits besides my wage. I have been told that this reduction is effective immediately and it is non negotiable. There will also be no lightening of my responsibilities nor reduction of my hours. My job description will remain the same. My employer is very resistant to ex-employees receiving unemployment benefits and he always fights every claim. He has told me if I do not accept the reduction he will consider that my resignation. Since I would have quit in his eyes, I would not be elligable for unemployment benefits and he would fight any such claim that I would make. Does anybody have any advise? What are my rights?

  2. #2
    Join Date
    Nov 2001
    Unless you have a bona fide contract (not an offer letter, a CONTRACT) that specifically says otherwise, they can legally cut your wages all the way down to minimum wage as long as they give you whatever notice is required by your state. (Most states only require that you be notified in advance of the reduction, which you were; I only know of two states that require x number of days advance notice and surprisingly enough, CA is not one of them.) Nothing in the law requires that a reduction of wages also must include a corresponding reduction of responsibility.

    Nothing in the law gives you the right to refuse the reduction and still keep your job at the higher pay. The employer decides who gets paid what, not you. The employer is most likely correct that refusing the reduction will be seen as a quit (although it would depend on the EXACT circumstances and your state law). You are also correct that a quit over a reduction in pay probably would not qualify you for unemployment benefits. However, in many states (and while I do not know for certain I will be EXTREMELY surprised if CA is not one of them) a wage cut this drastic would entitle you to receive partial UC benefits WHILE CONTINUING TO WORK AT THIS POSITION, to make up some of the difference caused by the wage reduction.

    Your boss can fight it all he wants. HE'S not the one who makes the decision who gets benefits; the state does. If you qualify for benefits under your state law and under the circumstances involved, you will get them, no matter how hard he fights. You shold be aware that if he were to fire you or take any adverse action against you, because you apply for partial UC benefits after a drastic wage cut, you would have a nice little wrongful termination (public policy) lawsuit to file against him.

    NOTE: In some states it is just barely possible, because the wage cut is so drastic, that such a cut MIGHT be seen as a termination and qualify you for benefits. I wouldn't be holding my breath on that one, but it would certainly be worth your while to call your state UC board on Tuesday and ask. It would seem to me that at worst, you would be able to receive partial benefits while working at the reduced rate, but only your state UC board can say for certain.

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