Can An Employer Take a Raise Back?

In Wisconsin, the employment relationship is at-will. The employer and employee determine the terms and conditions of employment and, absent a promise of employment for a certain period of time, the relationship and its terms can end or change at anytime. Because of the at-will relationship, an employer may take a raise back without violating the law. What it may not do is to take pay back for work already performed at the rate under the pay raise. It’s a matter of expectations. Where an employee works for an agreed upon wage, even if it was the result of an unexpected pay raise, the employee is entitled to get paid at that rate. Once the work is performed, the employer may not modify the rate of pay for that work already performed. Taking pay back or failing to pay the wage at the rate agreed upon when the work was performed will violate the employee’s contractual rights and state wage laws. Deducting future paychecks for any such retroactive reduction in the wage rate also violates Wisconsin law.

Work for Pay Purposes Defined by Federal Court

The Seventh Circuit Court of Appeals recently decided the appeal of employees asking to be paid for time spent washing off at the end of a shift, which would sometimes cause overtime. The Seventh Circuit is the federal appellate court covering cases arising in Wisconsin and other states in the Midwest. In Musch v. Domtar Industries, Inc., 587 F.3d 857 (7th Cir. 2009), the court stated that under wage laws, an employer must “pay their employees a wage for all the ‘work’ they do.” In looking at both Federal and Wisconsin wage laws, the court said that “work” is defined as “physcial or mental exertion (whether burdensome or not) controlled or required by the employer and pursued necessarily and primarily for the benefit of the employer and his business.” In this case, the court found that time employees spent washing up at the end of a shift was not “work” under this definition. The employees worked around hazardous chemicals and showered at work after their shift. The employees apparently did not present evidence that they has known exposures to the chemicals each day, and the employer did pay for this wash time when an employee had a known exposure.

When Showering At the End of a Shift Is Time “Worked” for Pay Purposes

The Seventh Circuit Court of Appeals recently decided the appeal of employees asking to be paid for time spent washing off at the end of a shift, which would sometimes cause overtime. The Seventh Circuit is the federal appellate court covering cases arising in Wisconsin and other states in the Midwest. In Musch v. Domtar Industries, Inc., 587 F.3d 857 (7th Cir. 2009), the court affirmed the trial court’s decision to dismiss the employees’ claim to pay for the time spent washing at the end of a shift, even though these employees worked in an environment where they may have been exposed to hazardous chemicals, though the plaintiffs apparently did not present evidence that they were actually exposed on a regular basis and the employer did pay for time spent washing after a known exposure. The rationale behind the opinion is that washing at the end of the shift, where employees do not have a known exposure to hazardous chemicals, is for the convenience of the employee and not the employer. Since the wash time is not a principal activity of the employees’ work or related to a principal activity, it is not “work” and therefore the employer need not pay the employees for their time spent washing up.

Can Employers May Not Force You To Agree to Wage Deductions for Loss

In Wisconsin, employers may only make deductions from an employee’s pay
with written permission from the employee obtained before any loss
occurs. The law is found at Wisconsin Statutes section 103.455. If you
refuse to sign such a document, it is unlawful to terminate you for your
refusal. If you are not responsible for the loss due to negligence,
carelessness or willful and intentional conduct, which it seems is
apparent from your description, then any deduction by the employer is
quite burdensome on employees and probably unlawful. There are penalties
for making unlawful deductions under the law equal to twice the amount
of the deduction. Any written document or agreement in violation of this
law is void, which means it is unenforceable and could not negate the
employer’s liability for such a violation. An employee is also protected
from retaliation for bringing a claim against an employer that violates
this law.

Tough Times Has Employers Abusing Wage & Overtime Pay Rights, According to Recent Report

In a July 2009 report, Confronting the Gloves-Off Economy, Americas’ Broken Labor Standards and How to Fix Them, published by the UCLA Institute for Research on Labor and Employment, the Center for Economic Policy Research, The Center on Wisconsin Strategy, and the National Employment Law Project, the authors talk about how employees are suffering wage, overtime pay and other workplace violations due to the tough economic times and requirements imposed by employers. The report is based on a larger work, The Gloves-Off Economy: Labor Standards at the Bottom of America’s Labor Market. According to this report, workers are facting an increasingly unfair fight in America for legal wages. The report discusses the problems with the labor laws, how they don’t cover everyone equally, union issues, day laborors, immigrant labor, law-wage job issues, rehabilitation of offenders and jobs, and where the country may need to go with a “living wage.” The report is available at www.nelp.org.