Can an employer apply one-off pay cuts via forced contributions? Are US employers allowed to unilaterally cut the pay for an employee, specific team or all employees through a one-off measure? Are forced contributions to charity, pay reductions during an economic crisis, fines for not meeting performance goals, and others legally above board? From my limited understanding of US labor law, an employer is free to reduce pay going forward for any reason that isn't covered by specific anti-discrimination laws. And as a company-wide measure applied to future pay this also doesn't seem like it could be construed as an illegal deduction. But I'm not finding a straight answer. This question was inspired by this question about an employer reducing pay to buy the CEO's book and this off-site article about an employer fining people for being late. Can an employer apply what are effectively one-off pay cuts through enforced contributions, fines or other measures?
Can an employer apply one-off pay cuts via forced contributions? No. This type of issues pertains to state law, and many (if not all) jurisdictions in the U.S. have statutes prohibiting forced deductions that are neither ordered by court, nor pursuant to bargaining agreements, nor as required or expressly permitted by law. See, for instance, MCL 408.477 and .478. The case of the CEO's book sounds in clear violation of MCL 408.477(2) since the user who asked on Workplace SE mentions that the employees did not consent to that deduction. Even if an employee consents to the deduction, it is important to discern between (1) his altruistic consent, and (2) his concession for the sake of continuation of employment. Unless the consent is altruistic, the clause(s) allowing for the deduction might be rendered null and enforceable by virtue of Restatement (Second) of Contracts at § 178(1) in relation to the aforementioned statutes. Any form of deductions as a permissible sanction (as fining when the employee gets late to work) would have to be provided in the agreement between employer and employee. Otherwise it is unlawful.
Unfortunately, you are probably not entitled to the redundancy / severance money since you weren't technically ever made redundant / laid off - there was no point in time where you were willing and able to work where they refused you, and I presume you were paid for all time worked. If you're concerned that they only changed their tune because they knew you had a better job already lined up - well, you can call their bluff or just use it as a learning experience. In what jurisdiction do you work? If the US, you could call their bluff, say you'd rather stay and see what they do. You would then keep the option of simply walking away with your stuff in a box any time you felt like it (assuming at-will employment and no contracts that state otherwise).
If everyone hired after date X has a different contract from anyone hired before that date it is not discriminatory. (As long as they do nothing naughty like changing the contract, hiring three black people, changing the contract back).
The US Department of Labor Employer's Guide to Advance Notice of Closings and Layoffs states Can I pay my workers their salary and benefits for 60 days in lieu of notice? Neither the Act nor the regulations recognize the concept of pay in lieu of notice. WARN requires notice, making no provision for any alternative. Failure to give notice does a significant disservice to workers and undermines other services that are part of the purpose of the WARN Act. However, since WARN provides that the maximum employer liability for damages, including back pay and benefits, is for the period of violation up to 60 days, providing your employees with full pay and benefits for the 60-day period effectively precludes any relief. (emphasis mine) So from the Federal perspective, so-called pay in lieu is technically against the WARN act, but no penalty may occur. Note that payment in lieu is not unique to this situation at all. For regulated high-trust industries, such as banking and aviation, pay in lieu is basically required due to the risk of employee sabotage.
Go to know that you live in Washington. Per RCW 49.48.210, They must give you written notice with their evidence. Per RCW 49.48.210, section 3, you can (and should) request a review of the employer findings. Since the employer gave you the money, and you nor they saw any error until now, you may be protected under estoppel (WAC 388-02-0495). In the response letter, I would write something along the lines of " [Company Name] has paid IAW my expected rate and acted correctly when I received my money. I have also spent the money in good faith. Indeed, I still cannot see that any overpayment has actually happened. Please send me exact details why you believe that I have been overpaid, and why you believe that estoppel does not apply. Until this manner has been resolved per RCW 49.48.210, section 3, I request that you continue to pay my wages at normal rate for my time. I do not accept liability for the actions or inactions of [company name] and the claimed overpayment." Get receipt that the employer received the notice. Because it is in review, they don't have the right to garnish your wages. Challenge everything at the review. If something was changed or edited, challenge that. I would open up a new thread if they did that much. Best of luck
It looks like your PTO already met the legal qualifications for the law were met by your PTO policy prior to the law's enactment. The linked material lists the exemption for full time employees. You should have a leave balance in your pay stub (and if not, you should talk to your company's payroll department to find out your balance(s)) and can use leave that you have for sick leave (they just aren't calling it sick leave it). Likely your leave is valid for sick or vacation leave combined or you have two pools (sick and vacation) that you can use any leave pool for sick days (typically, sick leave will be paid out on departure from the company and has no caps on banking it (if you have X amount of hours per year and don't take sick days at all, you can add that to the sick leave you get next year) so you can retire early by using the sick leave to cover the time you would have remaining to work before retirement benefits can take over. Vacation or Annual may also payout but has a cap on banking (often this bank will be the days per year value of the year. If in year one you take no vacation days, you can still have X vacation days banked in addition to year 2's days, but you need to use that same amount by the end of year two or you will lose the hours banked in year one. Basically amounts to longer Christmas Break for a lot of people).
The only reason you couldn't take all the profits is if your business were a C-Corp. I don't know of any reason a single-owner LLC would elect to be taxed as a C-Corp. Multi-owner LLCs and LLPs are, for federal tax purposes, either an S-Corp or a C-Corp. When possible they can and should generally elect to be taxed as an S-Corp. IRS Pub 2553 lists the criteria for S-Corp election. (Employees have nothing to do with the question.) For tax purposes partnerships, sole proprietorships, and S-Corps are "pass-through" entities that are not expected to pay a corporate tax. In effect, whether you like it or not, you do pay yourself all of the profits each fiscal year, and they are taxed accordingly.
If you could successfully prove constructive dismissal (you probably could) then you have been terminated and would be entitled to the pro-rata bonus. Of course, if the company is not in a financial position to pay your wages, it probably can't pay the bonus either.