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Wrongful reduction from full time salaried exempt to part time hourly nonexempt?

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  • Wrongful reduction from full time salaried exempt to part time hourly nonexempt?

    I am going to try this without too many specifics.
    My wife was recently reduced from salaried exempt with benefits to part-time, hourly, non-exempt (or even still exempt, not really sure) with reduced hours and no benefits. I know that part is legal. The hourly rate was what she was making as a salary employee at 40 hrs. But....

    She has been under contract for the past 18 months for a monetary value to be owed unless X number of years is commmitted to the employer. Here's the tricky part. The contract says " the event that you terminate your employment ahead of the payback schedule [X number of years], or fail to fulfill the employment commitment at any time prior to the expiration of the progam, you agree to immediately refund the prorated portion that has not expired from your payback schedule."

    The contract does not say anything else in regards to anything relevant. She has also signed a commitment letter of no time commitment but with a wage listed as $X/annually and benefit were listed as well. This was signed before her initial employment two years ago.

    Employer tells her she is required to work the X number of years and that the partime/fulltime does not effect it either way. And that is in her benefit... They are pretty much forcing her to quit and therefore terminate her employment because pay will be almost half of what it was annually.

    My questions are:
    1) Does the reduction void the contract?
    2) Is this a legal reduction since there is a contract. She would not have signed it if she knew there was a possibility of losing her pay, hours, and benefits. We do realize WV is "at-will" employment.
    3) If she were to leave, does she still owe the prorated amount.
    4) They terminated her fulltime position, so does that count as a termination and therefore void the contract?

    Also, the notification of reduction was made about one week after the commitment started.

  • #2
    The answer to any and all contract law questions is "take the contract and any other related documents to a local attorney who will have to read all documents in their entirity". Taking a little piece of the wording out of the contract is meaningless since in all 50 states, the contract is a function of the entire contract (and related documents) as addressed by state law.
    "Reality is that which, when you stop believing in it, doesn't go away".
    Philip K. **** (1928-1982)


    • #3
      It isn't at all clear what she would be paying back but DAW is correct that only an attorney who has reviewed the entire contract and is familiar with the laws in your state can tell you if what you have is truly an enforceable contract.
      I post with the full knowledge and support of my employer, though the opinions rendered are my own and not necessarily representative of their position. In other words, I'm a free agent.


      • #4
        One last thing. Labor law such as FLSA are laws imposed by the government on the parties. Examples are minimum wage and overtime rules. The parties (employer, employee) cannot get rid of statutory labor law requirements because these requirements are externally imposed by the government and the government is not a party to the contract. It would be like me trying to sell your car to someone else. I do not own your car, so I cannot (legally) sell your car. As an employer or employee I cannot legally waive MW/OT rights since I never owned/controlled those rights in the first place.

        It is not possible for a contract to dispose of something that that neither party legally owned/controlled in the first place. Past that, as long as we stay with issues that the parties could legally dispose of in the first place, then it is a function of how the exact wording of the entire contract interacts with the your state's contract law. So regarding the pay back provisions you mentioned then first question is whether or not the parties had a legal right to contract it in the first place. This is never a yes/no question, but always a "that depends" question. And you are always going to end up with a "have the attorney read the contract" answer to all contract law questions.
        "Reality is that which, when you stop believing in it, doesn't go away".
        Philip K. **** (1928-1982)


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