Details Matter in Pay Reduction Cases
The short answer is: it depends. Generally speaking, a claimant who voluntarily leaves their last work without good cause connected to the work is subject to a disqualification of benefits. (OESC § 2-404; Okla. Stat. 40 § 2-404). So when and what circumstances would it be permissible to quit after a pay reduction and still collect unemployment benefits?
Generally, the terms of an employment contract are agreed upon at the time of hire. Any substantial pay reduction or in other forms of compensation can establish good cause for you to leave your place of employment and still collect benefits. Other types of compensation considered include per diems, health benefits or other benefits.
So the question that must be answered in each case is whether the pay reduction materially altered the contract or resulted in a substantial loss of pay. It must be a substantial loss. Thus, a one-time delay or error in a paycheck would not be considered to be substantial. But if the problem was persistent, it might. A failure of an employer to pay wages in a timely and accurate manner may also be sufficient. In addition, the employee must make the employer aware of the problem and give the employer time to remedy the situation.
Thus, if your employer cut your pay by 15 percent or more, without negotiating a new agreement, that may be a substantial enough pay reduction to merit leaving your job as long as you gave the employer notice of your objection and the opportunity to fix the problem. A two percent pay cut, however, may not be enough to qualify as a substantial loss. A temporary small pay cut may not be substantial enough. The cut must be substantial and the problem persistent.
A reduction in an employee’s per diem that would have cost the employee a loss of $147 every two weeks was held to be sufficient to merit the employee’s quitting. This was an adverse change in the hiring agreement. Benefits were allowed. (82 AT 9295; 83 BR 202)
But if the change is temporary, benefits may not be allowed. A claimant was told he was going to be laid off from his position but could accept a job at a lower classification as part of a union contract. He would not have been prevented from returning to his new job if it became open. The claimant quit in order to look for a job with higher pay and filed for unemployment benefits. They were denied. The total difference in pay, at $110 per month was not substantial and was only temporary. (82 AT 6671; 82 BR 1580)
These two cases do not seem to be that different in terms of amounts involved, yet they had differing outcomes. Distinctions matter. Small facts that may not seem important to may be critically important in terms of getting your unemployment benefits.
When small facts matter, make sure you hire an unemployment expert in Tulsa to help you understand the process and to help you understand what facts will make a difference in your case. Oklahoma unemployment is a complicated area of the law. Don’t try to do this alone.
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