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Can boss legally cancel raise of employee who gives notice?

Breaking up can be hard to do because, absent a union contract, companies can set terms for salary increases, which aren't mandated by labor laws.

When an employee gives notice the company can

When an employee gives notice the company can cancel a retroactive raise. Photo Credit: Getty Images/iStockphoto/BernardaSv

DEAR CARRIE: My company said it was going to give us a raise retroactively to April.

Shortly after that I gave notice. Now my employer says I am not entitled to that raise. Is that legal? — Vanishing Raise

DEAR VANISHING: It is probably legal. And I am sure you have learned, albeit the hard way, that before you give notice, you should know what the company policy is regarding pay raises and other perks for departing employees. In fact, some companies have policies that state that once you leave their employ for any reason, you forfeit upcoming extras like raises or unused paid time off. And those policies are perfectly legal as long as employees are informed ahead of time. Sometimes, breaking up really is hard to do.

DEAR CARRIE: I work for a New York company that was taken over by another company this year. It is the acquiring company’s policy to hold back one week’s pay when employees are hired. So it is now imposing that requirement on us. My question is this: Does the new company have to pay interest on the money it will be holding? Also, the merger was effective months ago, yet we still have not been told if we will have permanent positions in the current company. So can it still do the salary hold? — Free My Salary

DEAR FREE: You are probably talking about a “pay lag,” which is legal, an employment attorney said.

“A short lag is permissible between the time that compensation is earned and when it is paid,” said Richard Kass, a partner at Bond, Schoeneck & King in Manhattan. “For example, if a pay period ends on Saturday, the employer may pay employees for that period the following Friday.”

And he added, “If the former employer didn’t have a pay lag and the new employer does, the employees may have a week when they don’t have a payday,” he said. “That might feel to the employees like a withholding of pay.”

But it is just a pay lag, he said.

As for your not being told if you have permanent positions, that is an unrelated issue from your pay lag.You are an employee, and the employer, absent a union contract, can set employment terms for you. For more information, call the state Labor Department at 516-794-8195 or 212-775-3880.

DEAR CARRIE: My daughter works at a bank. She often has to travel to meetings at a new branch that is farther away. The bank pays her mileage from her home branch to the other bank, but it won’t pay mileage for the return trip. Is this legal? — Wrong-Way Banking?

DEAR WRONG-WAY: This question falls into the category of perks, which companies don’t have to offer. Companies can set the terms for perks. It does, however, seem odd that the bank offers one-way reimbursement for a round trip. Because the bank doesn’t have to offer reimbursement for mileage, it is actually being generous in offering to reimburse your daughter for just one way. Many companies reimburse employees for extra mileage, so some employees believe the payments are mandatory. They are not. 

CORRECTION: An earlier version of this story incorrectly said that a worker might be able to claim unreimbursed business mileage expenses on her taxes. The Trump tax cuts signed into law late last year eliminated that deduction as of Jan. 1.

Go to bit.ly/LImileage for more on federal laws and mileage reimbursement.

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