Q: There are 5 salaried employees at my job in Illinois (myself included). We've been told we must now switch to hourly pay, and will only be called in to work on
an as-needed basis, not to exceed 20 hours per week. And if we don't accept this, they will take it that we resigned, and we will not get unemployment benefits. For instance, my current salary is $55,000 a year. They want to
change me to $16 an hour, on an as-needed basis, up to 20 hours a week.
Do I have to accept this? It's more than a 50% cut in my pay. They are telling me if I don't accept it, then I am resigning. I don't want to resign, but I also can't afford to take a 50% cut in pay. I couldn't find an answer on the Illinois Dept. of Labor's website and I came across your name and website while searching. I am hoping you can help me. KM via email
A: Your employer has put all of you in a truly untenable position! But I think he's either lying about your state's unemployment insurance rules, or hasn't bothered to look them up.
If you quit rather than accept this draconian pay cut, I think you will qualify for unemployment insurance.
In New York, what you're describing is called a 'coerced resignation' -- and as I explained in an earlier post, that doesn't disqualify you for unemployment benefits.
Each state has its own unemployment insurance rules; but in this case, the Illinois law sounds very similar. According to Illinois Legal Aid:
If you voluntarily leave (or quit) your job, you can only get unemployment benefits if you left for "good cause." "Good cause" means that you must have a very good reason why you quit. This reason must be serious enough to make a reasonable person in the same situation leave the job. The reason for leaving also must result from something done by your employer.
These reasons include:
- Sexual harassment on the job
- Change in working conditions that make the job unbearable
- Abusive behavior on the job by coworkers or supervisors
- Your boss breaks a law which affects you (for example: not paying you minimum wage)
- A big cut in your hours, benefits, or pay rate (my emphasis added)
- Your boss changes work shifts, causing child care or transportation problems
Illinois Legal Aid says to preserve your rights, "before quitting, you must make reasonable attempts to resolve the problem with your employer. It is best to keep records of this by sending a letter to your boss that states the problem and asks that the boss find a solution. Your letter should be as specific as possible. It should have the date on it and explain the problem in detail."
In your case, that means explaining in detail that you cannot afford to take a pay cut of more than 50%, and will therefore be forced to leave the job if he imposes it. My advice is to keep the letter extremely courteous. Write it in sorrow, not in anger. Ask him to reconsider. It's just possible that he will offer a compromise once he understands that you'll quit rather than accept his terms.
If not, you can write a letter of resignation that refers to the first letter. ("As I explained in my August 22 letter, it's impossible for me to cover my living expenses -- housing, groceries, utilities, etc -- on less than half of my current salary. I am therefore forced to tender my resignation.")
Then file for unemployment insurance without delay.
If you type your zip code into a box on the Illinois Legal Aid site, you'll get referrals to local organizations that may be able to help you. You might also want to peruse the Illinois Unemployment Insurance Benefits handbook.
Your other option if your employer won't back down after you write the first letter is to stay on at half-pay while you look for another job. That small income still may exceed what you'd get from unemployment insurance -- and if you only work 20 hours a week, you'll have time for job-hunting.
Please send your questions to Lynn@LynnBrennersFamilyFinance.com. I'm sorry I can't respond personally to every email. Questions are only addressed online.
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