Skip to main content

Can the new owner(s) cut your base salary when they first take possession of the company you work for?

San Diego, CA |
Attorney answers 3

Posted

As long as you don't have a contract with the old owner dictating your salary (and the chances are very slim you would), your employer may prospectively change your compensation at any time. So, yes, the new owner can cut your pay.

Posted

Probably. Unless you are represented by a union, have a contract that guarantees you a certain wage or the pay cut is based on your race, sex, disability, etc., then the employer can do whatever it wants; this goes for a current employer or a new employer. Unfortunately, employees and job applicants have very few employment rights, and employers have a lot of leeway in how they choose to run their businesses. In general, an employer can be unfair, obnoxious or bad at management. It’s not a level playing field. An employer hires employees to provide work for its benefit, not for the benefit of the employees. Don't expect the employer to take care of its employees; it doesn’t have to and it rarely does.

As I mentioned, there are some limitations on what an employer can do, mostly in the areas of public policy (such as discrimination law or whistle blowing), contract law, union-employer labor relations, and constitutional due process for government employees. Please see my guide to at-will employment in California which should help you understand employment rights: http://www.avvo.com/legal-guides/ugc/an-overview-of-at-will-employment-all-states. After you take a look at the guide, you may be able to identify actions or behavior that fits one of the categories that allows for legal action. If so, an experienced plaintiffs employment attorney may be helpful.

Employment rights come from the state and federal legislatures. One of the best things people can do to improve their employment rights is vote for candidates with a good record on pro-employee, anti-corporate legislation. Another way to protect employment rights is to form or affiliate with a union, or participate in a union already in place.

I hope you can resolve your situation and wish you the best.

twitter.com/MikaSpencer *** All legal actions have time limits, called statutes of limitation. If you miss the deadline for filing your claim, you will lose the opportunity to pursue your case. Please consult with an experienced employment attorney as soon as possible to better preserve your rights. *** Marilynn Mika Spencer provides information on Avvo as a service to the public, primarily when general information may be of assistance. Avvo is not an appropriate forum for an in-depth response or a detailed analysis. These comments are for information only and should not be considered legal advice. Legal advice must pertain to specific, detailed facts. No attorney-client relationship is created based on this information exchange. *** Marilynn Mika Spencer is licensed to practice law before all state and federal courts in California, and can appear before administrative agencies throughout the country. She is eligible to represent clients in other states on a pro hac vice basis. ***

Posted

As the competent employment attorneys have indicated, California law allows the employer and business owner great latitude in hiring and firing of at-will employees.

This law is a recognition by lawmakers that businesses need flexibility in the manner in which they run their business, and should not be unreasonably constrained from making personnel decisions by the law.

Please check the law of your state

Marilynn Mika Spencer

Marilynn Mika Spencer

Posted

Not so. The at-will employment doctrine is a hand-me-down from the old master-servant relationship in the 18th and 19th centuries, which itself was a derivative of feudalism. Master-servant in particular was specifically embraced by those in power to favor the masters (employers) over the servants (employees). A chief goal of this was to prevent "combinations" of employees, a pre-cursor to labor unions. At-will persists because the employers have the resources to influence the legislators in ways that working people do not. It is no coincidence that most of the worker-friendly legislation in the United States came about during times when labor unions were stronger and presented a degree of balance against the unrestrained power of corporations and other employers. The 40-hour week, overtime, an end to child labor, minimum wage, health benefits, pensions, unemployment benefits, sick leave and vacation . . . all of these were due to unions. Now that unions are in such decline, there is a parallel decline in medical coverage, pensions, etc. The minimum wage has not kept pace with inflation. "Flexibility" for an employer too often results in people working full-time and still qualifying for welfare, such as with most WalMart employees. This is bad social policy. One need only look at the growing number of unemployed, uninsured and homeless people in this country to see the harshness and one-sidedness of the at-will doctrine.

David Gary Jones

David Gary Jones

Posted

Agreed. But clearly the policy as advanced by employers in light of capitalism considerations seeks to strike a balance between potentially business crushing employment laws, taxes and regulations and pension burdens and employee rights to reasonable conditions of employment and job protection.

Marilynn Mika Spencer

Marilynn Mika Spencer

Posted

It certainly is not "clear" and I don't buy the argument. Capitalism most certainly does not make an effort to balance the needs of owners and workers. Otherwise, how could over half of WalMart's full-time employees still qualify for government assistance, while the Walton family is one of the richest in the entire world? Capitalism provides absolutely no job protection, as demonstrated by employment at-will. There is little impetus for capitalists to provide "reasonable conditions" or "job protection" and if fact they rarely do so, unless they cannot get the workers they need to keep working and making profits for the owners. What the heads of corporations find "crushing" are laws that protect workers from abuse.