is an employee eligible to receive unemployment benefits due to a change in their pay structure?

UPDATED: Oct 1, 2022

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is an employee eligible to receive unemployment benefits due to a change in their pay structure?

An hourly employee is changed to piece work but their job is not terminated and full-time work still exists doing the same job. Can they quit and claim unemployment benefits? My initial thought is that they would not since they are not being fired and their current job remains intact with a different method of pay. I understand that they could perhaps qualify for partial benefits if their pay was reduced by changing the method of pay, however wasn’t sure if just changing the pay structure was grounds for being eligible to quit job and receive benefits.

Asked on June 3, 2019 under Employment Labor Law, Kentucky


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

No, changing pay structure in no way qualifies someone for unemployment: you can be switched among hourly, salaried, piece work, or commission (or some mix thereof) at will. IF there is a sufficiently large pay reduction as a result (typically one third or more; 25% *might* be enough), that reduction might qualify as "constructive termination" (be effectively fired by the job being made untenable to the average reasonable person) and so enable the work to quit and claim unemployment, but if the total pay remains similar to what it had been, he or she cannot.

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