Do companies have to honor employee contracts during a pandemic?


Lots of at-will employees have been laid off or furloughed because of the pandemic. But what if you have a contract? Can they cut your pay or skip bonuses?

Attorney David Barron at Houston's Cozen O'Connor says it depends on the contract.

"Many bonus agreements have clauses that say the company can change its mind or if there's unusual business circumstances that would warrant doing something different they would be able to do that."

Barron says some companies are negotiating on the fly.

"What we're seeing is many companies are going to employees and saying 'look, we know we promised to do this but this is a pandemic; we need to do something different.'"

Barron says if you have a contract that guarantees a certain amount per year the company has to pay it, but they can cut salary now and make it up later.

"Some contracts just have an annual amount; if that's the case then you have no guarantee on a weekly or monthly basis and companies could certainly defer that and make it up later in the year. Other contracts have a specific amount on a bi-weekly or monthly basis."

Barron says it's all about how the contract is written.


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