My new job came with a pay raise that is being rescinded

Question

I have worked for my company (based in California) since May 2019. I was offered and accepted a new role in late November with a new higher salary effective 12/1 (New job start date). This was presented to me in an offer letter I signed and returned accepting the position and new salary. Last night I was sent a “CA Wage Theft Protection” notification and an email from my boss with the below note:

As discussed, the company has decided to remove the pay increase from moving from Customer Service to Operation as we feel this is a lateral move and should not be accompanied by a pay increase. Your pay will be reduced back down to $xx,000 on 12/17/2020. Please sign the attached and return back to me.

I’m trying to wrap my brain around the legality of this since I technically started a new job and it wasn’t simply a pay raise.

Answer 1

They can do this

California is an at will employment state. So assuming that you do not have a contract with a specific salary for a specific date range (e.g. $XY,000 per annum from 12/1/2020-11/30/2022), a specific notice period ("either party may terminate this agreement with 90 days notice"), an agreement to only terminate for cause, or maybe a strong union agreement, they can reduce your pay and essentially fire you from the new rate job and offer to rehire you at the old rate new job (or any rate really as long as it meets minimum wage).

As for the paper, this is a notice that going forward your salary is the old rate. The relationship to wage theft is that going forward, if they don't pay you at that rate then they are in violation. For the pay period that started 12/1, and really only for the days that you worked before they told you the rate is going back, they have have to pay you at the higher rate or it would be "wage theft".

(Note: general information, not legal advice. I am not a lawyer anyway.)

As others have said, what to do is up to you, including leaving. Maybe the operations is more to your liking even at the old salary, maybe you will be less stressed not having to deal with customers. Or maybe the different responsibility is not worth it. You could also try to negotiate but it has to be now. For example, respond that you don't find this acceptable compensation for the added responsibility. They could say too bad, but recognize that it could be a pain for them to have to find someone else for this job, and that is your chit in this game. Or maybe there are 3 other people who would have wanted it but they picked you. If one of these people is acceptable to them, you could be out of luck. You know better than us what the situation is at your place.

Answer 2

Time to move on to another company

First, as stated in the comments, discuss the legality of this with an attorney. This will vary state to state, but most states are at will employment.

I will add too, that in most states I have experience in, the company will not be breaking any laws adjusting your salary, sadly.

The real answer though is start looking for another job, ASAP. Keep your head down and don't make waves while looking. But at the end of the day, do you want to work for a company that would (and did) do that to you?

Answer 3

Google does not return any results other than this question for the exact phrase "CA Wage Theft Notification". According to this site

The Wage Theft Prevention Act (AB 469) goes into effect on January 1, 2012. The new legislation amends existing laws (Labor Code sections 98, 226, 240, 243, 1174, and 1197.1), and adds new requirements (Labor Code sections 200.5, 1194.3, 1197.2, 1206, and 2810.5) which criminalizes willful violations for non-payment of wages after a court judgment or final administrative order; requires restitution to the employee in addition to a civil penalty for failure to pay minimum wages; requires that specified information be provided to employees at the time of hire

So this sounds like it is a notice given to satisfy the Wage Theft Prevention Act, but it's a bit weird to call it a "Wage Theft Notification".

The above site also says

As of April 11, 2012, the template has been updated to indicate that the Acknowledgment of Receipt section of the template is only optional. Signatures by the employer or employee may provide assurance that the notice was, in fact, provided by the employer and received by the employee.

If you want to be sure your signature isn't taken as consent, put something along the lines of "Signature indicates only receipt and does not constitute acceptance or waiver of any right or claims." right before your signature.

You don't state in the question whether your boss had, in fact, previously discussed this with you, but since you don't say that they had, I assume they hadn't. So you should start out asking what they are talking about and trying to get this clarified. If this can't be resolved in your favor, you'll have to decided whether to accept this or not. If you don't, you should send an email and a written letter stating something along the lines of:

I am currently employed at the salary of $yy,000, as agreed upon in the offer letter given to me on [date]. I have been informed that the company is not willing to continue this employment. It is therefore my understanding that effective 12/17/2020, this company has terminated my employment.

Don't let them frame this as you quitting. You are willing to continue working at your current employment. They are terminating the current terms of the employment and proposing different terms. If continue working after the 17th, you will be agreeing to those other terms.

In either case, you should be considering other employment.

Answer 4

I’m trying to wrap my brain around the legality of this since I technically started a new job and it wasn’t simply a pay raise. Appreciate the insights!

Just as you can insist on a pay raise and quit if they don't give you one, they can insist on a pay cut and fire you if you don't accept one. By default, they have most of the same rights you do unless your agreement with them states otherwise.

The reason for the wage theft notification is to ensure that you can't later claim that you did not know that they offered you work at a reduced rate and were expecting the higher salary. They can't just force a lower salary on you unilaterally -- either you must accept the reduction (which is what they're asking you to do) or they have to terminate you.

Note that whether or not you are eligible for unemployment benefits if they terminate you for refusing to accept the pay cut is a complex legal question. In most jurisdictions, you are not eligible for unemployment if you refused a reasonable offer of work, so it will usually come down to whether their offer of work at a reduced salary is considered reasonable according to the laws and guidelines for your jurisdiction.

I 100% agree with those who suggest you look for a job elsewhere. Note that if you refuse the pay cut, you may be calling their bluff and they won't actually terminate you. But obviously, I'd leave anyway because what they did is awful.

Answer 5

You need a lawyer if you want legal advice. Most lawyers are happy to talk for free in the initial consultation, so reach out to your network - the people who run your favourite bar, acquaintances - to find a lawyer.

Answer 6

notification and an email from my boss with the below note:

Your boss is just trying to make it look like a previously discussed and mutually agreed decision. Signing it without asking what discussion is he referring to is basically doing what he needs done and saving him and the company any further effort.

Answer 7

First, contact your new boss and ask for a more specific explanation and explain this situation emphasizing this is a new position not a lateral transfer. With people transferring during the pandemic, it could be you were confused with an existing employee that is taking a lateral transfer. If you new boss does not support you, that tells you it is best to look elsewhere.

If in fact the raise is being rescinded, I would look for another job unless you are desperate, and then leave this company as soon as you can. I would not work for a company that did this unless I was desperate. Later, after you have settled in to your new job, report this action to the better business bureau in the state where the company is incorporated, and if you can without detriment to your career post this behavior on appropriate web sites.