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Pandemic Unemployment Assistance for wage cut?
The horrible greedy company I work for fired a substantial number of workers and cut non-exempt workers to 4 days/week with a 20% pay cut. But for exempt workers like me, our pay was cut by 8%-25% based on salary (mine was towards the lower end), but we are still expected to work a full 40 hour week.
I know there are laws against cutting the pay of exempt employees, and I also have an employment contract, and those are separate matters that I will be looking into and not asking about here (or maybe I'll ask as a separate question).
I know that the people whose wages and hours were cut can collect unemployment, but if my wages were cut but not my hours, would I be able to collect? I am in NY in case it matters.
It is actually an employment agreement. But it says "This base salary may be adjusted from time to time based upon Employee's performance." This pay cut is related to the economy, not performance, so I think it is a breach of contract under the law. As far as unemployment, with the extra $600 the maximum is $1,104/week, but I'm still making a little more than that after the pay cut, so maybe I wouldn't qualify just on that. But I'm still going to apply without a clear cut definitive answer.
It's not an employment contract in the sense that I can quit at any time and they can fire me at any time, but I think if they want to reduce my pay, they would have to fire me and try to rehire me. If they did it that way, I would refuse to be rehired, and I would be allowed to collect unemployment because the pay is far below the amount I'd have to accept for my occupation under state law.
2 Answers
- A HunchLv 71 year ago
Do you have an employment "contract" or employment "agreement"?
If it's an agreement, it's not a contract. As long as you are notified before you work under the new wage, it is legal to cut your wages as long as you are earning at least your state's exempt minimum wage. It your state doesn't have a minimum for exempt employees, the federal requirement is $455 a week.
If you have a "contract" your company has to abide by the terms of the contract.
Unemployment is ALWAYS based on a reduction of income (not hours). If someone's hours are cut but their hourly wage is increased to match the original income they would not be eligible.
Are you eligible for unemployment? Based on what you have told us, you can apply for unemployment but with an income reduction of 25% or less, you likely will not qualify.
- If you are making more than $504 per week, it would not be worth it to apply because you are making over the maximum UI benefit.
In response to the comments:
You are an "at will" employee. You can quite at any time and they can let you go at any time (unless there is a state law that limits the power of "at will" agreements).
- Unless you are in Montana, as long as they tell you before you work the shift of the pay reduction, they can reduce the plan. this allows you to not work if you don't agree with it. In Montana they can change your pay at any time before you area paid (weird law).
- They do not need to fire you and rehire you.
You are misunderstanding how the extra $600 works. But it doesn't matter because you are earning more than UI, so you aren't eligible for a payment anyways.
Additionally, you don't understand how the CARES Act works. It allows the states to determine who is required to look for work on a case-by-case basis. Let's pretend you quit, are granted UI, and your employer offers you a job. If your UI case worker has deemed that you are required to look for work, you would have to accept that job or no longer be eligible for UI.