Thursday, September 09, 2010

UC - voluntary quit - reduced wages

Krantz v. UCBR - Cmwlth. Court - Stpe. 9, 2010 - unreported memorandum decision

Where a claimant asserts that an employer’s unilateral reduction of his wages was the reason for his decision to quit, the claimant must prove that the reduction in wages was unreasonable and substantial in order to establish cause of a necessitous and compelling nature for quitting. Griffith Chevrolet-Olds, Inc. v. UCBR, 597 A.2d 215, 218 (Pa. Cmwlth. 1991). Mere dissatisfaction with one’s wages is not enough. Id. Each case is determined based on its own circumstances, and there is no talismanic percentage that separates a reduction that is substantial from one that is not. Ship Inn, Inc. v. UCBR, 412 A.2d 913, 915 (Pa. Cmwlth. 1980).

Because it must be a unilateral action of employer that causes the loss in wages, the Court has considered the issue differently based on whether the claimant receives a salary from employer or receives, in whole or in part, a commission reflective of conditions beyond the employer’s control (such as the claimant’s effort). See Griffith Chevrolet; # 1 Cochran, Inc. v. UCBR, 579 A.2d 1386, 1390-91 (Pa. Cmwlth. 1990); Grenier v. UCBR, 505 A.2d 1363, 1365 (Pa. Cmwlth. 1986); Morysville Body Works, Inc. v. UCBR, 430 A.2d 376, 377 (Pa. Cmwlth. 1981).

Where the claimant is a salaried employee, it is a relatively simple matter to determine whether there was an unreasonable, unilateral reduction in the claimant’s salary, whether it was due to unilateral action by employer, and whether the reduction was “substantial” under the circumstances of that case. Morysville Body Works, 430 A.2d at 377. In contrast, where the employee’s income consists, in whole or in part, of the receipt of commissions, it can become much more complicated to determine whether any reduction in income constitutes a necessitous and compelling reason to quit. Grenier, 505 A.2d at 1365.

Thus, in determining whether the reduction in a claimant’s pay by an employer’s unilateral action is substantial, the claimant’s commission history must be considered when calculating the claimant’s pay. Of course, even if the claimant’s pay is commission-based, where the reduction in the claimant’s pay is the result of the employer’s unilateral actions, the claimant can establish cause of a necessitous and compelling nature to quit his employment. #1 Cochran, 597 A.2d at 1388.