Retroactive Reductions of Benefits or Pay Illegal

Employee Rights Attorney

Mission Viejo, California

Q: My employer announced a few weeks ago that the number of vacation days we earned per year has been reduced, retroactive to 1999. As a result, many employees who had a couple of days vacation in the bank are now in the hole several days. Can they do this?

A: “It is illegal for an employer to retroactively change compensation or benefit commitments.

“It is unethical and illegal to induce you to work according to certain promises of compensation or benefits and then to retroactively reduce or eliminate them. It’s the same concept as inducing you to work for a certain salary, then cutting your pay after you have completed your workweek.

“This could constitute a breach of your employer’s contract with you. Bit if the company never intended to comply, its actions could be considered fraud.

“An employer could change benefits in the future, however if it doesn’t violate its contractual commitments. It also would be appropriate for the employer to give adequate advance notice of these changes in benefits.

“You could raise your concerns with your employer-either individually or by joining with other employees. If you are unsuccessful, you could contact the California Division of Labor Standards Enforcement, which should provide assistance without charge.

“Although it would be illegal for the company to retaliate against you, it can be difficult to prove subtle forms of retaliation that might affect future opportunities there.”