QUESTION
Is it legal to change the way and how much an employee is paid after you hire them?
Asked on Jul 10th, 2012 on Employment Contracts - Indiana
More details to this question:
I work for a retail establishment and have 3 store managers in training working for me. They are paid as salaried employees. Recently the co. decided to change their pay structure to hourly. Under this new structure they would be expected to work 48 hours a week to get roughly the same pay they were making before. 40 hours straight time with 8 hours overtime a week. All three have stated that their pay is now less than before but none of them signed a pay letter when they were hired and the company has stated that there is nothing they can do for them without it. They are also losing vacation pay as they will only be paid for 40 hours vacation and not 48. I don''t want to lose these valued employees and really want to help them out is there anything I can do?
1 ANSWER
In most jurisdictions, absent a contract specifying how much an employee is to be paid, an employee is employed at will, which means that he can be fired at any time for any reason that is not statutorily prohibited (such as on the basis of race, religion, etc.) This means that an employee can be fired for refusing to accept a cut in pay. The contract does not have to be an individually negotiated one. For example, it can be a union contract, or sometimes the terms of an employee manual. However, absent some sort of binding agreement, the terms of compensation can be changed.
The employer cannot rescind benefits which have already been earned, however. If your trainees had already earned paid vacation, the employer cannot now rescind it, although it may be able to require the trainees to give up that vacation as a condition of future employment.
Answered on Jul 10th, 2012 at 5:00 PM