Legal Question in Employment Law in Maryland
A base salary was agreed upon and a bonus plan was added to compensate me for the managerial duties that I would be performing. Starting January 2010, the company is changing the bonus structure and evaluating my base pay semi-annually. This gives the company the option to increase or decrease my base pay and quarterly bonus compensation at their discretion. The company would like for me to sign a document acknowledging and agreeing to this change. Can the company legally (forcedly) change my base-pay? Do I have to sign the new 2010 document and agree to the change? What are my options?
1 Answer from Attorneys
The answer depends on whether you are a contract employee or an at-will employee. Most employees are "at-will." I'm assuming your question relates to changing pay rates for future work - work already performed must be paid at the compensation level already in effect.
In Maryland an at-will employee has no guarantee of employment and can be fired, laid off or demoted at any time for any reason (except for illegal reasons such as racial discrimination). Similarly, the employee can quit at any time for any reason. An employer can set pay at any level and can increase or decrease so long as the pay complies with minimum wage and overtime laws.
Contract employees may enjoy certain rights and protection from firing or pay decreases. Basically for a contract employee the contract sets the rate of pay and any changes during the contract term must comply with the contract.
If you are employed under a contract you may wish to consult with an employment lawyer in your locale.
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