If my employer told me that I can either take a salary cut or return my company vehicle, is that legal?

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If my employer told me that I can either take a salary cut or return my company vehicle, is that legal?

I have been working for this company for 10 years. When I was hired the company agreed to a certain exempt salary with a company vehicle. Recently, they told me that if I don’t want a salary cut that I must return the vehicle. What should I do?

Asked on January 5, 2018 under Employment Labor Law, Texas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

If you have a written contract for a defined period of time (e.g. a ten-year contract) which is still in effect and which guarantees you the company vehicle, the cannot take it away in violation of the contract. However, without a written contract guarantying a benefit or perk or salary, an employer is free to change (including reduce) benefits or compensation at will. So the employer may legally either take away the car or cut your salary--or give you a choice between the two--if you don't have a written contract guarantying  you both the salary and the car.
The fact that you are over 70 most likely does not matter in this case: employers may make legitimate, non-age-related decisions even if they negatively impact an older employee. Reducing costs by either taking back the company car or reducing your salary to compensate for the car is a legitimate economic decision that is not age related.


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