Employer wants to change salary after I signed contract

Question

I was offered a position at a job recently and was pretty excited. The offer was above the other offers I received at other companies so I declined the others and accepted this one. After verbally accepting I found out that the amount I was told was actually not the base pay but 10% above the base pay with a "performance review" bonus. I begrudgingly accepted knowing the constraints and downfalls but with a positive outlook forward.

Next came the most stressful phone call I received through this process. I was told by the recruitment manager handling this employment opportunity that HR thought I lived somewhere else and now that they know my real location they need to have a "conversation" about my salary. This is after me signing the job acceptance letter with my salary and everything else written out. The recruitment manager goes on to tell me that the place of origin they thought I lived has higher living cost and they calculate that in the salary for employment. Only thing is I received offers not much lower than the offer I received with the current company at the same location I live in. I also consult and have charged the same no matter what location I have lived in. I find this highly disruptive and it leaves a sour taste in my mouth. What should I do? Should I negotiate? If I should how should I handle this "conversation"?

Edit: People have asked in the comments how the employer was informed of the wrong location and I would like to update that the recruiting agency presented that information incorrectly. This position is also 100% remote.

Answer 1

Run away. Don't just walk.

I see a pattern of deceitful behavior by them.

I was offered a position at a job recently and was pretty excited. The offer was above the other offers I received at other companies so I declined the others and accepted this one.

The only reason you accepted their offer was that it was higher than others.

After verbally accepting I found out that the amount I was told was actually not the base pay but 10% above the base pay with a "performance review" bonus.

First red flag :

After you accepted they lowered their offer.

I begrudgingly accepted knowing the constraints and downfalls but with a positive outlook forward.

Big mistake.

This told them you would accept a lower offer and can be pressured to do so. It may have made them greedy.

I would suspect they are actively looking for employees who are easy to manipulate in this way. I doubt this would be the first issue. You'd likely find your hours and workload constantly being "revised" and always upwards. Seen it before.

Next came the most stressful phone call I received through this process. I was told by the recruitment manager handling this employment opportunity that HR thought I lived somewhere else and now that they know my real location they need to have a "conversation" about my salary.

A highly dubious claim by HR and note it's by phone and not in any written form, like email. I find that suspicious in light of the overall pattern : get you to take less than they first offered.

This is after me signing the job acceptance letter with my salary and everything else written out. The recruitment manager goes on to tell me that the place of origin they thought I lived has higher living cost and they calculate that in the salary for employment. Only thing is I received offers not much lower than the offer I received with the current company at the same location I live in.

So you know now they are a low-paying company and have reason to think that they practice "bait and switch" on employees (and possibly customers ?).

I also consult and have charged the same no matter what location I have lived in. I find this highly disruptive and it leaves a sour taste in my mouth. What should I do? Should I negotiate? If I should how should I handle this "conversation"?

I'd have already walked away by now.

It's clear you can get offers from other companies so you know you have a value to other companies. I would regard everything they've done as an appalling set of red flags that they are terrible employers. A company that made you a fair offer (even a lower one) straight up and stuck to it would probably be a safer long term bet.

The most kind interpretation is that their HR department is incompetent. That alone would be a red flag to me if I had other similar offers.

This is a "run away don't walk" situation.

Response to question edit.

Edit: People have asked in the comments how the employer was informed of the wrong location and I would like to update that the recruiting agency presented that information incorrectly. This position is also 100% remote.

This does not change my opinion as it is still ambiguous and could simply be an agency taking (or been given) the blame for their paying customer - your prospective employer. Also recall that they made an offer and backtracked on that (by changing 10% to a bonus *after you accepted the original) and then came up with the issue about location justifying (in their opinion) a reduction in the offer (which was only ballpark your location in the first place). So I would still regard their behavior as deceitful.

It's been my experience that some companies are straight from the get go and others tend to always have an excuse/justification/reason why they feel it's OK to give you less money or more work. If a company cannot manage a good hiring process, it's common sense to wonder if they're a bad employer.

This is still a "run away don't walk" situation.

Answer 2

You should not negotiate. You should say “this is what we agreed on, so this is what you need to pay”. This is an awfully red flag.

One possibility is to take the job to make sure money comes in, and immediately start looking for a different job. If you leave after two months, that’s about the worst way to punish the company legally because by trying to stiff you, the lost two months salary, the work of all the people involved in getting you up to speed, and they have to find a new victim.

Answer 3

To add to the other answers, you should not only reevaluate the new offer, but also consider if you still trust this employer to stick to agreed terms in the future.

Personally, I would see this as a red flag. The cost of living in your location has little to do with what they can offer to a new employee. This new information should be insignificant to them.

Unless, of course, you have lied to them about your location to negotiate higher salary.

Edit based upon comments: While I agree, that, knowing the location, the employer might try to optimize their costs and take into account cost of living before making an offer, I think my statement is still correct. Regardless, such discussion is relevant when talking about the specifics of negotiation before making an offer. This time however, the offer has been made (twice) and then changed to a lower one. This might not be done on purpose or with malicious intent, but I believe OP would benefit from seeing this as a red flag and exploring other possibilities.

Edit based upon edit of the question: Although this seems to be a muck up of the recruiting agency, it still is a red flag, since the offer has already been made. Given that the OP has received other offers that are more attractive, the safer way to go is still to try to explore those offers.

Answer 4

I assume here that you didn't misstate your location somewhere during you application, but that it is a mistake that the company made.

You have a signed offer letter, and can make the case that you accepted this job under the conditions in that letter, and hold the company to that. Them changing this because of a mistake they made is unprofessional. You can choose not to accept this. You do need think about the potential outcomes. If they agree and keep the current salary, that's good for you. However, if you insist on the salary it could also mean that the offer is rescinded or that you'll be let go on the first day.

There is no way for us to tell how firm the company will be on insisting on a lower salary. But you need to go into the meeting knowing what you will and will not accept. So figure out what the minimum is that you'd be okay with, for example if you'd accept to split the difference, if you'd accept no lower salary at all, whether you'd accept additional PTO days as compensation.

You've had offers that are better than their proposed new salary, so saying no and looking for another offer is always an option if you don't need a job immediately.

Answer 5

As a contractor, you really need to be able to trust your employer.

And by that I mean, that if you work for them, and that if they don't want to pay you, they can just decide not to pay you. And as a contractor, technically, you can sue them, but suing someone is not as easy as everyone thinks.

So please keep this in mind when making your decision. They've burned you, not once, but twice already, and you haven't even started working for them yet. If you accept this latest development, there is a very high likelihood that they will keep on putting the screws to you. In addition to that, they'll probably criticize your output, no matter how well you perform, because that's what clients do when they intend not to pay someone, they constantly criticize that person's work.

Like some of the others have said already, you need to go back to the other offers you had and tell them about the bait-and-switch. And also, you need to keep on interviewing with other companies.

And this next time around, don't even think about rejecting other offers until you've actually signed the final contract (and seen the employee manual if for some reason the final contract refers to it in any way).

After verbally accepting I found out that the amount I was told was

Yes, this was a mistake. Never accept a verbal offer. Next time, tell them. "This sounds good. I'll make my decision after I see a final copy of the contract."

"Then yes, if you want a very quick answer, then I will need a copy of that contract very quickly." In other words, never accept an offer too quickly. If you accept an offer too quickly, you'll induce buyer's remorse in the other party.

actually not the base pay but 10% above the base pay with a "performance review" bonus.

Also never accept such nonsense. If they want to put you on probation until your performance review, that's fine. In other words, don't be afraid to make it easy for them to terminate your contract at a moment's notice. That can be their escape valve, should you not workout. And no, paying you 10% less is not an escape valve, that's just nonsense.

But any increase in pay needs to be automatic and written into the contract. After all, if they've moved the goalpost on you once, they will move it on you again.

So if I were you, I would go back to my previous offers, and at the same time, I would take this as an opportunity to retract my original concession with the current company, but I wouldn't go through the recruiter, I would try to go through the original hiring manager. If anybody wants to hire you, it's the hiring manager, so make sure that this person is looped in and that this conversation is not going on behind their back.

But again, be extremely wary of this company. Even if they agree to all the original terms (after you play hardball), that company is not be trusted. Hire a lawyer to review the contract. Work for them at your own peril. And only work for them if you have no other equivalent offer from anyone else, and if you're really desperate.

Answer 6

This is a conversation where your best bet is either

• very direct, or
• fait accomplis

Filling in the gaps, I agree with others who say"watch the red flags". You have 2 options - try to see if its fixable, or just go (optionally staying short term till new job arrives).

Other answers make the case for walking g away, and I agree with them. But you might want to see if its fixable. If so, being direct will be key.

Being direct here, means saying up front, without lengthy justifications and excuses, that you are concerned about their pattern of behaviour and/or issues so far, even before joining. (Get those details from other answers that summarise them very well).

State that you do not consider anything discussed, as a valid basis to reduce your agreement. Alternatively if they wish to reduce it as stated, you look to them, to reinstate the verbal agreement that was originally stated.

As a result, you would like them to either 1) confirm that the agreed contract of employment stands, as agreed, or 2) confirm that they wish to break their contract.

End in a conciliatory face-saving note, something like - I hope this has been simply a minor miscommunication, but my salary is not something to shave away at, after agreement, and I hope you will appreciate that position. I hope to be able to join you shortly, for many years of productive employment.

I don't say that you should do that. But if you want to try dialogue and not just walking, that's one way to approach it.

Answer 7

Seems like someone in HR really screwed up and now desperately tries to get out of that. The most fortunate turn of events for them would be if you would just agree to changing the contract. So you can hardly blame them for at least trying. But you have a contract, and assuming they also signed it, you can demand that the other party sticks to it.

Unfortunately, that contract very likely has a termination clause, which they can invoke at the first opportunity. Fortunately, doing so might not be a very good idea for them. The exact language of the contract will tell you if they can actually fire you before you start working, and whether you have a notice period during which they need to pay you. They might actually be obligated to pay you for a couple weeks. And then there is of course also all the sunk cost they invested into hiring you and the opportunity cost of finding a replacement on short notice. So sticking to the contract might be in fact the less costly solution for them in the short term.

However, if they stick to the original contract, then you can assume that they are going to use every opportunity they can to correct their mistake. Assume that your first performance review will mention that you are being overpaid and claim that they can not give you a raise which would put you above what you are "supposed" to get. And in most companies there is no realistic way to appeal performance reviews.

Answer 8

I don't think we know enough information here to jump to a conclusion, maybe the recruiter was careless in communication or maybe there was a misunderstanding between someone in HR. I don't care if you live in India on a dollar-a-day as far as I'm concerned the value of your remote work should be based on your performance period.

My advise would be to stick with it, sometimes we need to play the cards we're dealt. You may find out more later, like maybe this recruiter has done the same thing to other employees or someone in HR is known for this type of thing. Don't take it personally that won't help, just keep your options open and work with what you've got.

Answer 9

I was offered a position at a job recently and was pretty excited. The offer was above the other offers I received at other companies so I declined the others and accepted this one. After verbally accepting I found out that the amount I was told was actually not the base pay but 10% above the base pay with a "performance review" bonus. I begrudgingly accepted knowing the constraints and downfalls but with a positive outlook forward.

The last time someone tried that with me, my answer was - and yours should be "You offered that amount, and that was what we verbally agreed on."

I was told by the recruitment manager handling this employment opportunity that HR thought I lived somewhere else and now that they know my real location they need to have a "conversation" about my salary.

The term for this is something I can't use in SE - but involves what comes out the south end of a north facing male cattle. Your HR department generally has multiple opportunities to check your location. Unless you were lying about it - there's no excuse for this.

The recruitment manager goes on to tell me that the place of origin they thought I lived has higher living cost and they calculate that in the salary for employment.

NOT your problem. You agreed on a salary to do work for them. Its contingent on HR to work out all this.

This is after me signing the job acceptance letter with my salary and everything else written out.

That's a contract, and one side can't unilaterally change it. Ask any changes be documented in writing, not over the phone, and make sure you have copies for your reference. The very request something's in writing should scare anyone up to no good, and now its more than your word against theirs. If its not on your contract you arn't tied to it - and since your employer seems hostile, I suggest sticking to the letter of it until you find another job. Its entirely possible its a rogue HR person, but it dosen't seem like they have your interests at heart at all.