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NYS - Deferred Salary Payout... Need Guidance

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  • NYS - Deferred Salary Payout... Need Guidance

    I am a salaried and exempt employee in NYS, with an employment contract stipulating annual base salary. Earlier this year our (small) company instituted a company wide defered salary program due to the business struggling to become profitable. The deferral amount was percentage based depending on position, tenure, and, in some cases, criticality of the position/employee to the company.

    Executive management did not mandate a signed deferral agreement and assured employees they would make good on the deferred salaries when the company was "doing better". The prevailing projection at the time was that this would be a 2-3 month period. Some employees asked for, and recieved, a deferred salary agreement, and some, including myself, did not. Repayment dates for deferred earnings were not stipulated in the contracts.

    Several weeks ago the majority of employees were restored to their regular salaries with the defered earnings still to be paid "when the company was doing better". I am considering resigning in the very near future and would like to know what my legal grounds are to recover my defered earnings (<$20K) in the event the company does not agree to a lump sum payout upon my resignation. Thanks in advance...

  • #2
    Was this a tax-deferred arrangement? Or just a salary cut with a "promise" to pay the difference later? Without a written agreement that rises to the level of a valid, enforceable contract, I see little hope for recovery. Although verbal "contracts" can exist, ones that can be enforced are few and far between.
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    • #3
      Thanks for the reponse Patty... this was a salary cut. I was considering small claims court, does this make any sense? My contract, payroll records, and the company employees can all verify there was a salary reduction program in place. Unfortunately, as a small company, many of us were just operating in a "good faith" climate.


      • #4
        You can take a shot at it if you like, but unless there is an written agreement to restore the "lost" salary, I wouldn't be optimistic. Sounds like they were also overly optimistic about there success; that is not unusual with small, start-up companies. The rewards for working for such a company can be great (think the original employees at Microsoft who bought stock early) or can be devastating at worst.

        FYI, such recovery of "lost" salary would be rare in the business world. I worked for an international oil drilling company in the 80's and 90's and there was an across the board salary cut at one point when business was bad. We did ok on salary increases later, but even this company with over 8,000 employees didn't promise such wage restoration, and especially not in writing.
        I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.


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