Employment: When Can A Pay Cut Justify Good Cause For Leaving Your Job And To Collect Unemployment?

You may or may not know this, but whether you, as an unemployment compensation claimant, have good cause to leave your employment is a factual determination that is ultimately made by the Unemployment Insurance Appeal Board (especially when your previous employer challenges your claim that you left with good cause and are therefore entitled to unemployment benefits).  The line becomes more muddled when an employer cuts your rate of pay or commission and doesn’t necessarily fire you or demote you from your job position.

Recently, the Supreme Court, Appellate Division, Third Department, upheld the determination by the Unemployment Insurance Appeal Board that a nearly two-thirds reduction in an employee’s rate of pay constituted a substantial change in the terms and conditions of his employment, and represented good cause for him to leave his employment.  He was employed as a finance manager for an automobile dealership, and his commission was reduced from 20% to 7.5%. Thereafter, he applied for and received unemployment insurance benefits. The employer challenged the employee’s entitlement to benefits on the ground that he left his employment without good cause.  The Court held that the factual determination of whether the reduction in commission constituted good cause was to be made by the Unemployment Insurance Appeal Board, and that the Unemployment Insurance Appeal Board’s  decision will not be disturbed when supported by substantial evidence.  If you have any questions regarding employment benefit claims, contact the attorneys at Bashian & Papantoniou at (516) 279-1555 or stop by for a visit at 500 Old Country Road, Suite 302 in Garden City, New York.

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