Can I collect unemployment if my current employeer cuts my wages by 32 and changes my income from salary to hourly?

I live in Arizona and do not have a employee contract and therefore are an ‘at
will’ employee. I was given a notice that management feel I am not a good fit
for my current position and while I maintain this position, until a new
employee is hired, they are adjusting my current wages from salary to hourly
and cutting my wages by 32. After my position is filled, they feel I would do
best in another department which would be a training period and a cut in
hours. Can I collect unemployment if I decline this demotion?

Asked on October 16, 2017 under Employment Labor Law, Arizona


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

You *may* be able to get unemployment, but it is not certain.
First, forget about the salary to hourly change; that is irrelevant. How you are paid (hourly vs. salary) is not only 100% up to the employer but *never* is considered to be grounds to quit and get unemployment. After all, if you earn, say, $52k per year, how does it matter if that's in the form of a $52k salary or getting $25/hour for 40 hours per week?
As to the pay cut: while employers have the right to cut to your pay, a significant-enough pay cut could be considered to be considered to have made your working conditions so outrageous that essentially no one would work there and so you were "constructively"--or effectively fired. But that's a high hurdle to get over: since it is a given that (if you don't have a written employment contract), that employment is "employment at will," it is accepted that you have no right to your current and your employer may reduce it: the reduction must be so great and the resulting pay so low that it's absolutely shocking so as to convince the unemployment agency that you could not be expected to work there anymore. That depends on the context/facts. For example, I used to work in educational publishing. At the time, my company paid junior editors around $40k/year...but other publishers in the same area might pay them only $26k - $30k. If my company had cut someone's pay by 32%, that would still leave them earning the average for their field--that would not be grounds to get unemployment. So you need to look also what you will be earning and how that relates to the job you will be doing in your area, to see if the reduction might be seen as great enough as to constitute constructive termination and let you get unemployment. 
There is, unfortunately, no way to know in advance if you will be able to get unemployment, since it is judged case by case.

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