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wallstreetfighter
wallstreetfighter, Employment Lawyer
Category: Employment Law
Satisfied Customers: 17252
Experience:  14 years exp, General counsel for National Corp. firms, Hostos College instructor, Represented employees in discrimination lawsuits
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I was asked to defer a portion of my salary due to revenues

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I was asked to defer a portion of my salary due to revenues being low. I have an email confirming the arrangement. It was suppose to last for only a couple of months but it has been six months. If I leave or they let me go, am I entitled to the compensation that was deferred?

WALLSTREETLAW :

Hello I am a licensed attorney. I am here to help answer your questions. Please do not hesitate to ask for clarification

WALLSTREETLAW :

If the arrangement was clearly written that it would be limited,

WALLSTREETLAW :

you could sue the employer for back wages,

WALLSTREETLAW :

You should also have an attorney send a letter threatening legal action since they have failed to pay you as per your agreement,

WALLSTREETLAW :

If the arrangement is not clear in terms of the payment you would have a difficult time trying to obtain back wages, as they will claim you allowed the deduction, and did not limit it

WALLSTREETLAW :

If the agreement was based on company revenues, you could sue them and force them to prove that revenues were still low, if they were not, they would have to pay you the wages,

Customer:

It was a conversation, then I followed up with an email stating that I was agreeing to having it deferred but there was no date stated by which it would be paid. The agreement was based on a downturn...I had just joined the company...and I was told by the CEO that by Q2 things would be back to normal. Revenues did not improve much, however, he has continued to hire new people and bring on several consultants and consulting firms for various types of work.

WALLSTREETLAW :

Which such an open agreement, it would be difficult to enforce,

WALLSTREETLAW :

What you should consider is advising them that you want to be paid the amount promised at the start,

WALLSTREETLAW :

and see if they agree,

WALLSTREETLAW :

I would even consider asking for an increase to cover the deferment,

Customer:

I have asked, his response is that "we're not getting the results we need" or he can't predict when things will improve. He is now engaging a firm that is looking at restructuring all compensation for the company but I need to know where I stand as it amounts to about $30k at this point...

WALLSTREETLAW :

unless you have an agreement that was written that states they would increase your pay again, or that the reduction is temporary, or based upon revenues, I do not see how you can sue them for back wages, as the reduction was agreed,

WALLSTREETLAW :

If the salary was deferred

WALLSTREETLAW :

and you quit,

WALLSTREETLAW :

you should sue them for the deferred amount,

WALLSTREETLAW :

however, if you are still employed it would be difficult,

WALLSTREETLAW :

If you quit, you can sue for the deferment, as under the law, all wages are supposed to be paid after separation,

WALLSTREETLAW :

Employees who quit or are laid off should be paid their last paycheck on the next regular payday. Fired employees must receive their final paycheck by the next business day

Customer:

Yes it was definitely deferred "to a later date tbd" - he responded in an email that that was the understanding.

WALLSTREETLAW :

that is fine, because it was deferred and not waived or reduced, it would be wages that has to be paid,

WALLSTREETLAW :

to force them to pay it however, the law would only force a resolution if you are terminated or quit, as the law requires all wages to be paid by next payday

Customer:

Okay, so to confirm, your opinion based on what I've told you is that they would have to pay the deferred amount whether I quit or was fired. And only the wages would be due even though I have not had use of the money or the interest it would have earned, correct?

WALLSTREETLAW :

yes, unless interest was agreed to,

WALLSTREETLAW :

If you are still employed and sue him, it would not be practical,

WALLSTREETLAW :

and the open ended agreement would be hard to enforce,

Customer:

I was not wise enough to insist on interest :-)

WALLSTREETLAW :

however the law in CT is clear regarding wages after separation,

WALLSTREETLAW :

all wages must be paid

Customer:

I am still employed and understand that it would not be a good idea to threaten legal action but as this has gone on for so long I wanted to know what to expect.

Customer:

Thank you for your assistance.

WALLSTREETLAW :

Yes, however I would submit a written letter stating the amount now deferred, and that you want a specific date when the deferment will stop

WALLSTREETLAW :

In Dobin v. CIOview Corporation, Dobin, a manager at a small consulting company that found itself in a financial bind agreed in early 2000 to defer a portion of her wages until the company's cash situation improved. Later that year, the company terminated Ms. Dobin's employment and paid her all of the deferred wages; she then filed a complaint against the company charging, among other things, violation of the Massachusetts Wage Act requirement that wages be paid within 6 days after the applicable pay period.

WALLSTREETLAW :

The Dobin Rulings:



  • The Wage Act protects all wages, including those of highly-paid, salaried executive, administrative and professional employees.

  • Salary payments that are contingent upon events other than the employee's job performance are not "wages." For example, a bonus payment conditioned upon working a certain number of days or upon the company's meeting performance targets would not be a "wage." Ms. Dobin's salary, however, was earned through her performance of her job and was therefore a "wage"-that its payment was deferred did not change this characterization.

WALLSTREETLAW :

The Court in CT would follow the above rule so you can be assured that the employer would have to pay you,

WALLSTREETLAW :

Good luck, so if you have any further questions please do not hesitate to ask.

Customer:

Can I get a transcript of this?

WALLSTREETLAW :

Yes, once you provide positive feedback, the entire conversation is saved, and emailed to you. If satisfied please provide us with positive feedback, so we can receive credit.

WALLSTREETLAW :

Thank you

Customer:

You've been most helpful. Thank you.

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