Can my employer force me to take a pay cut if I continue working remotely?

Should my salary be reduced if I am working from home?

Many employees who were working remotely during the pandemic are being asked to return to the office. But employers are facing hesitation in the face of recalling workers, especially in areas where COVID-19 cases are on the rise.

Employers asking employees to take a pay cut to continue working from home may face legal challenges.

“If you and your employer come to an agreement on your working conditions, including salary, then that agreement is valid,” says Lluc Cerda, senior associate at Samfiru Tumarkin LLP.

An employer can’t impose a significant pay cut on an employee’s salary. The employee does not have to accept a negative change to their compensation.

That could be grounds for constructive dismissal, says Cerda, which “essentially says that your employer has reneged on their deal to employ you at the salary that they pay you, and you’re entitled therefore to a severance package.”

How courts react to these claims depends on the relative severity of the changes being imposed by the employer. In situations where employers are asking an employee to take a pay cut of one- or two-per-cent, that may not rise to the level of constructive dismissal.

WATCH: Employment lawyer Lior Samfiru explains what employees need to know about working from home in season 5 episode 6 of the Employment Law Show.

Employers need to provide options

Employers have a variety of options when seeking to protect their profits. In the past, some employers have used the policy of red-lining – creating an upper salary limit for long-service employees who’ve already had several pay raises.

Other employers who are hiring during the pandemic can negotiate lower salaries in exchange for allowing employees to work from home before an employment contract is signed.

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• Lluc Cerda on 630 CHED discussing flexible work arrangements
• Ottawa employment lawyer talks pay reductions when working from home

But employers who are threatening to reduce the salaries of employees for allowing them to continue to work from home need to provide employees with an option to return to the office and remain at the same salary level.

Nevertheless, many employees want to know if there is a way to force employers to allow them to keep working from home. According to Cerda, “it’s hard from a legal perspective to require that your employer continue to allow you to work from home if they want to come back.”

Remote work accommodations for employees

The exception would be if there is a medical disability that puts an employee at risk of catching COVID-19 or childcare requirements that would cause the employee to stay at home. In that case, an employer must accommodate an employee who is making a work-from-home request.

In most cases, however, employees who worked in an office prior to the pandemic may not be able to make a case against their employer bringing them back, as it may have been an original term of their employment.

LEARN MORE
• Rights when forced back to the office in Alberta

Speak up about pay cuts

If an employer does try to impose a pay cut for making remote work a permanent aspect of their job, employees need to speak up right away. If an employee doesn’t speak up about a pay cut, that may put them at risk for future pay cuts. At that point, they will no longer be able to claim constructive dismissal.

That’s why employees facing a significant pay cut in exchange for being allowed to work remotely should speak to an employment lawyer at Samfiru Tumarkin LLP immediately. The firm, with offices in Ontario, Alberta and British Columbia, can advise you of your rights, help you make a claim for constructive dismissal, and make sure you receive all the severance you are entitled to.