Business Law/Ethics: Retroactive Pay Reduction (solved)

jotate

So having a friend in the HR department, I've gotten wind of some policy changes at my company which to the ears of everyone that's heard it sends up a shit ton of "damn, that's gotta be illegal" flags. Doing my best Googling, I haven't been able to come up with anything.

Basically, the plan is that if someone (non-contracted, exempt and non-exempt) quits without giving two weeks notice, they're going to retroactively decrease their salary to minimum wage for that pay period. We're on two week pay periods. So if I decided on the Friday ending a pay period that I wasn't coming back, they're going to reduce my salary for the two weeks that I already worked to minimum wage ($7.00/hr in Ohio) and pay it out the following Friday when I was scheduled to receive that paycheck.

I'm not personally worried about the situation, but it's definitely a big middle finger to every person working here and a piss in the ethical cereal bowl. My question is whether or not it's legal. Googling has led me to an unreferenced "definitely illegal" from a Texas specific site and a whole lot of "it's probably illegal" from user-based Q&A sites.

Anyone out there have some legal insight?

Kalkino

This would seem like a classic breach of contract situation, not withstanding any employment protection legislation you may or may not have. In the UK, this is illegal, based on wage protection rules and basic rules of contract.

jotate

Ohio has at-will employment laws in place. As I understand it, that means an employee can be hired, fired, or quit without notice. As such, we have no employee contracts in place. Which could be the glaring loop hole that makes this legal, in spite of it being fucking terrible.

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bowen

At will states basically have no protection against this. They probably don't even have to give you that two weeks pay if they didn't want to. They don't in NY, last I checked.

Ganluan

I am not a lawyer of course, but I believe in general the law states that any changes to an employee's pay scale can only be applied going forward, not retroactively. Now, if this "screw you if you're going to leave" thing is part of a hiring contract, then really the employee has no choice.

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bowen

mcdermott wrote: »

bowen wrote: »

At will states basically have no protection against this. They probably don't even have to give you that two weeks pay if they didn't want to. They don't in NY, last I checked.

Man, what? That doesn't seem right, because minimum wage is protected at the federal level, and last I checked all employees have to be compensated at a rate of at least the federal minimum based on pay period. You worked, you get paid minimum wage.

I was under the assumption that this was "oh hey I'm not coming to work again ever." I guess I miss-read that.

But yeah, if you're making $X/hr you keep making $X/hr until you're laid off or change positions, not because you put in two weeks notice. I'll try to find the particular law for your state but I'm sure any DoE worker will tell you the same.

Kalkino

Wow, employee at will seems rather harsh. So while the two parties contract at a certain price there is no consequence to changing that part of the contract without the other party's consent? Fuck that for a game of soldiers

bowen

Kalkino wrote: »

Wow, employee at will seems rather harsh. So while the two parties contract at a certain price there is no consequence to changing that part of the contract without the other party's consent? Fuck that for a game of soldiers

No that's illegal. They can make you sign an agreement and then kick you out the door if you refuse though.

Kalkino

bowen wrote: »

Kalkino wrote: »

Wow, employee at will seems rather harsh. So while the two parties contract at a certain price there is no consequence to changing that part of the contract without the other party's consent? Fuck that for a game of soldiers

No that's illegal. They can make you sign an agreement and then kick you out the door if you refuse though.

That makes a bit more sense. That last bit is a little crazy though, a little wild West really

bowen

Kalkino wrote: »

bowen wrote: »

Kalkino wrote: »

Wow, employee at will seems rather harsh. So while the two parties contract at a certain price there is no consequence to changing that part of the contract without the other party's consent? Fuck that for a game of soldiers

No that's illegal. They can make you sign an agreement and then kick you out the door if you refuse though.

That makes a bit more sense. That last bit is a little crazy though, a little wild West really

Well, not literally kick, but they can get security to escort you out.

But no, this is not legal in any way and I'd just as well work through my two weeks without giving them notice and then going:

"Today is my final day here, I've done this to protect my position and wage as dictated by our agreement on date of employment. Because I don't really owe you any fucking notice and a company that tries to pull this kind of shit on it's own employees deserves every inconvenience it gets."

But I'm an asshole like that. I burn bridges when the owner of the bridge turns out to be a german invasion team.

tsmvengy

bowen wrote: »

mcdermott wrote: »

bowen wrote: »

At will states basically have no protection against this. They probably don't even have to give you that two weeks pay if they didn't want to. They don't in NY, last I checked.

Man, what? That doesn't seem right, because minimum wage is protected at the federal level, and last I checked all employees have to be compensated at a rate of at least the federal minimum based on pay period. You worked, you get paid minimum wage.

I was under the assumption that this was "oh hey I'm not coming to work again ever." I guess I miss-read that.

But yeah, if you're making $X/hr you keep making $X/hr until you're laid off or change positions, not because you put in two weeks notice. I'll try to find the particular law for your state but I'm sure any DoE worker will tell you the same.

You were right, it is "I'm never coming to work again ever." For most jobs there is a one or two week delay between when you work and when you get paid for that work. So the worker worked for the pay period Nov. 3-Nov 14, and on the 14th he decided to quit and never come back. On his paycheck for that period (due to arrive on the 28th) he gets paid minimum wage for that pay period instead of his actual wage.

This sounds illegal to me.

bowen

Yes that is against US law, let alone state law.

Edit:

Covered under FLSA of 1938 if I'm not mistaken.

Also, you should really rub it in their face when you print it out and hand it to them.

jotate

That's my problem, though. I can't find the clause in the FLSA that specifically mentions why this would be illegal.

bowen

jotate wrote: »

That's my problem, though. I can't find the clause in the FLSA that specifically mentions why this would be illegal.

That's the thing I remember it too and am having a really hard fucking time isolating it.

I know it has something to do with you having already worked those hours so they can't dock your pay from that time you did work.

taeric

It is illegal because they are trying to modify your contract without your approval. If you sign something saying that they can do this, they likely can. So, when you decide to split, do not sign anything and your set.

bowen

taeric wrote: »

It is illegal because they are trying to modify your contract without your approval. If you sign something saying that they can do this, they likely can. So, when you decide to split, do not sign anything and your set.

I think it's illegal even if you sign. Just like you can't sign a contract that says "Yeah that number up there is totally bogus and if he were reading this he'd notice he's actually only getting $1/hr but he doesn't so hahah" is just as illegal as "We can garnish your wages for time you've already put in if you don't show up anymore because, well, uh, we need to train people, yeah!"

taeric

I'm not sure... you can legally sign documents retroactively raising your pay. So, we have already established you can retroactively change your pay. Question is, are you only allowed to change it up. I honestly don't know. The rest is easy, though. Regardless of if that is legal or not, you have to agree to it.

bowen

Yeah you're probably right, but regardless it still needs to be signed by the employee and most will probably sign it in lieu of getting fired.

taeric

Right, depending on what you are doing, you can quit and take unemployment for a few months while looking for a new job.

And, there is still a chance this is illegal, I just don't know. And, until they start trying to get you to sign something, I am just saying that it doesn't matter.

bowen

That's also true, they can't deny you unemployment for that. And I think you can draw longer than two weeks for unemployment.

jotate

In terms of having something signed to this effect, it's my understanding that this is an amendment being made to the Employee Handbook which may or may not require a new signed copy to be distributed. It would make sense to me in a situation such as that, that you'd require a new signature on these policies in order to not otherwise allow previously hired employees to remain grandfathered into the previous set of guidelines.

But then again, I'm having a difficult time focusing on the line between ethically logical and currently legislated.

Kalkino

jotate wrote: »

In terms of having something signed to this effect, it's my understanding that this is an amendment being made to the Employee Handbook which may or may not require a new signed copy to be distributed. It would make sense to me in a situation such as that, that you'd require a new signature on these policies in order to not otherwise allow previously hired employees to remain grandfathered into the previous set of guidelines.

But then again, I'm having a difficult time focusing on the line between ethically logical and currently legislated.

Then the next question is "how authoritative is an employee handbook term in relation to a core contractual term like pay or notice". If this was the UK the answer would be "fuck all".

bowen

Funny thing is I've found laws in the UK and NZ that basically told employers to fuck off garbage like this. But in the US? Not so much.

Kalkino

bowen wrote: »

Funny thing is I've found laws in the UK and NZ that basically told employers to fuck off garbage like this. But in the US? Not so much.

Same. In the UK it is pretty dammed procedural as well. For example - dismissals - even if an employer or manager has a bloody good reason (say proven theft), if they do not dismiss as per the statutory process then that will automatically make the dismissal unfair. Assuming one has a year's service.

ManonvonSuperock

1-866-4USWAGE

call, find out.

jotate

Apparently my buddy in HR spoke with someone who contacted the Ohio DoL to figure out how legal it is and came back with, as long as the wage is at least minimum wage, then it's legal.

Fucked up.

Regardless, thanks for the discussion and affirmation that I should totally move to NZ, PA.

taeric

As I was saying earlier, it pretty much has to be legal if you want to allow people to take lower wages at some point in the future. Otherwise, you wind up in a weird UAW situation.

Do not believe for a minute that you have to accept this, though. Do you have any vacation time saved up? If so, I really would quick, take the vacation pay at your current rate. Ride out unemployment for a short time to possibly raise up their rates, and then consider working for them again. If you are ever in an interview and they ask why you quit, state simply that you felt betrayed by the employer and they tried to force a change in contract on you. If any new employer does not respect this, you didn't want to work there regardless. (Maybe I'm a bit strong.)

bowen

Nope because I totally would've fucked them in the ass too but just not showing up for work ever if they tried to get me to sign it. And then sue them for breach of contract if they tried to dock my pay for something I didn't sign.

And then get the maximum amount of unemployment I could.

Cauld

Usually the way this works is that when you get hired you sign a piece of paper saying you get paid minimum wage + bonus/hour. When you quit without notice they revoke the bonus part. I've seen this policy at multiple places I've been employed.