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Ask Tina Your Own Question
Tina, Attorney
Category: California Employment Law
Satisfied Customers: 33167
Experience:  JD, 17 years experience & recognized by ABA for excellence in employment law.
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Can my employer legally reduce my salary when transitioning

Resolved Question:

Can my employer legally reduce my salary when transitioning from a written agreement to a signed contract.
Submitted: 5 years ago.
Category: California Employment Law
Expert:  Tina replied 5 years ago.
Hello and welcome,

A written agreement and signed contract are synonymous terms normally, so I don't understand your question.

Is there currently an employment contract in place for a term of years setting out the employee's wage?

Customer: replied 5 years ago.
My boss has suddenly decided to write up a contract for my employment. The contract includes a salary reduction of $12,000 annually. The previous agreement was written by a third party and agreed to by both my boss and myself. Is this reduction legal?
Expert:  Tina replied 5 years ago.
I see.

Was the previous agreement for a term of years? If so, has it expired now or is to continue through an established period of time?
Customer: replied 5 years ago.
No the agreement was not for a term of years. Nothing has expired
Expert:  Tina replied 5 years ago.
I see.

Then the employer can typically reduce your salary at any time unfortunately. You can refuse the new rate, which under the law is considered a new offer. However, the employer has not breached your contract since it was not for a specified term, so there would normally be no basis for seeking damages against them or taking other legal action.

If the rate reduction is 20% or larger, then you could refuse the offer, quit, and collect unemployment benefits while seeking other employment typically.

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