Can I get compensation from a company or an agency for a cut in pay due to no fault of my own?

I was working for an employer that sold our company and the employees to another company. I was making $20 an hour, now about $9 an hour. I will never be able to increase my production to $20 an hour with this company nor are there any other companies out there that will start me at such. I have debt that I pay on time and have never fallen behind on, but now that I am making less than half of what I used to, there is no way I can make my bills or provide for my family. This was of no fault of ours and told it was a business decision. We were offered no compensation for our cut in pay either.

Asked on October 25, 2011 under Employment Labor Law, Virginia


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Unfortunately,  the law does not enforce fairness. As a general matter, the owners of a business (whether people or another company) are free to sell their business to anyone they want--or to simply shut  it down, relocate it, restructure it, etc., regardless of the impact on the employees.

If you do not have an employment contract, including a union contract, you are an "employee at will." An employee at will can be terminated, or suspended, or demoted, or have pay cut, etc., at any time by his or her employee, for any reason or no reason at all--and a "business decision" (i.e. to cut costs or save money) is perfectly legitimate as a reason. It does not matter if the employee is to blame--the best, most loyal, skilled, and valuable employee in the world can have his or pay cut at will.

If you had an employment contract of some kind with the previous employer, depending on the terms of the contract and how the company was sold, you may be able to enforce it against the new owner, and if you had a contract, you should consult with an attorney to see what rights you have under it. However, otherwise, it is most likely that the new owners can do what they did.

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