Employee Confused As Company Retroactively Lowers Pay And Demands Repayment After Initial Offer

"I'll need to repay them to retroactively lower my salary to what they think it should have been from the start."

Damjan

• Published in Interesting
• October 30, 2023

Intricate salary negotiations and unexpected twists in employment agreements can leave anyone feeling perplexed and concerned about their financial stability. One Reddit user recently shared their experience with a salary correction predicament, shedding light on an issue that can potentially affect employees in the United States.

Last July, OP began working at their current company and received an offer letter with an annual salary denoted as A. OP accepted the offer and officially joined the company, receiving payments following the agreed-upon salary.

Approximately a year later, the company contacted OP, stating that the salary specified in the offer was inaccurate for the remote position OP occupied. They indicated a need to "correct" this, which entailed reducing OP's salary to an annual amount designated as B.

Subsequently, HR informed OP that the payment team would contact him in the coming months, requesting repayment for what was deemed an "overpayment." This "overpayment" was essentially the compensation aligned with the initially offered and accepted salary.

Unless the company refrains from following through on this or is engaging in a bluff, OP will be required to reimburse the company to retroactively align the salary with what the company believes it should have been from the outset.

For context, OP's offer letter indicated a position in the NY metro area without specifying remote or in-person work. OP's recruiter had verbally assured him that the position would be remote. However, the company now asserts that OP was listed for an office-based role, considering the initial offer letter a mistake.

According to the company, OP was supposed to receive an alternative offer for an explicitly remote position with a lower salary. Therefore, the company is not only adjusting the position to a remote one with a reduced salary but is also retroactively lowering OP's salary, necessitating repayment.

In an update, it's worth noting that the salary reduction occurred before the notification about the overpayment, and OP had already agreed to the reduced pay independently. A few days after accepting the pay cut, the company informed OP about the potential overpayment issue.

In hindsight, agreeing to the salary reduction may have been a regrettable decision, but at the time, OP was under the impression that this would resolve the matter. Additionally, OP is actively seeking alternative employment opportunities.

OP began his job with an annual salary A, but after a year, the company lowered it to salary B. HR is now suggesting that OP may need to repay the difference.

Offer letter was for a New York metro area position with uncertainty about remote work. The recruiter verbally confirmed it was remote

OP's employer initially lowered his salary, which OP agreed to, and later, they informed him about an overpayment issue.

An offer letter states the agreed-upon salary for his job, and once he would accepted it, they can't make him pay back money for past work if they lower his pay in the future.

There's a real risk that OP'll owe taxes on income he won't actually receive retroactively if he agrees to this change.

OP needs to consult with an employment lawyer

Once you accept the job offer and its terms, they can't change it unilaterally or retroactively

OP shouldn't agree to any retroactive salary reduction plan

Your employer can lower your salary for future workdays after notifying you, but deducting money from your pay or demanding repayment is illegal

It's advisable for OP to consult with a lawyer if he wishes to challenge this situation.

Employers cannot reduce your pay for hours you've already worked based on an agreement.

OP must seek legal advice from a labor attorney

In the United States, employment contracts and offer letters are generally considered binding agreements between an employer and an employee. If OP's offer letter states a specific annual salary, and he accepts it, that forms a contractual agreement.

If the employer made a mistake in the offer letter, it's typically their responsibility to honor the terms of the contract as written unless both parties agree to a change. Retroactively lowering an employee's salary and demanding repayment for what they consider an "overpayment" can be a complex legal issue.

Whether or not OP's employer can legally do this may depend on several factors, including state employment laws, the specific terms of his employment contract, and whether he has any written or verbal assurances from the company regarding remote work.

OP needs to remember that employment law can vary from state to state, and he needs to consult with an attorney who specializes in employment law to get the most accurate and relevant advice for his situation.

Damjan