The weeks leading up to a presidential election can be filled with emotion from both sides of the political fence. Presidential candidates look to shore up their respective support bases and suggest changes that might at first seem extreme, such as pushing through healthcare reforms, increasing taxes for individuals or businesses, or increasing regulations on certain industries. The current round of election agendas has covered each of these topics, and business owners that are worried about their implementation have gone on record for saying that they would cut benefits, jobs or both in response to any of these proposed changes.
With that, it may help employees to know their rights. For instance, is it possible for a company to eliminate jobs or cut salaries and benefits due to political retaliation? Below are some of the more important categories.
Right-to-Work Vs. At-Will States
An important distinction between states is whether they are "at-will" or "right-to-work." At-will employees have a much lower level of job protection. Right now, there are an estimated 28 at-will states, and 22 right-to-work states. Employment is as it's stated, and at-will, which means an employer can basically be fired or let go for any reason. This severely limits any rights to fight for wrongful termination, be it because of political retaliation or for any other reason. There are, of course, limited circumstances where an at-will state employee can indeed turn to litigation. In matters of discrimination, taking family or medical leave, or leaving to serve in the military or on a jury, there are certain protections that exist.
A key benefit in right-to-work states is an easier ability to form a union, which is intended to let employees band together and protect their rights against employers. Under union agreements, there can be more clearly defined worker rights, such as pay levels and raises, working schedules and specific terms for being fired or terminated. There are many debates over whether at-will laws or right-to-work ones are the best for employees and employers, but the above general differences do make a difference in worker rights between states.
When it comes to the ability for employers to cut or restrict pay, there is much latitude for them to do so. Of course, the federal minimum wage, which is currently $7.25 per hour, sets a floor that employees must pay their workers. The current rate was set on July 24, 2009. States also have individual minimum wage requirements. Beyond this, there are not set amounts on the number of employees a firm may hire, so they can get around overall wage spending goals by simply hiring fewer workers. Overall, it does appear that employers have the upper hand in handing out pay levels, even if they are seen as arbitrary.
Ability to Influence Benefits
When it comes to adjusting employee benefits, there are more restrictions. Generally, it is difficult for an employer to cut pension and related retirement benefits already promised to former workers. For state employees, these benefits may also be considered law that cannot be cut under any circumstances. Employees that have not yet retired can see the current schedule of benefits altered or cut back, though. The ability to change healthcare benefits has become more restrictive since new Federal healthcare regulations have been implemented, but employers still have pretty wide latitude to cut benefits altogether.
The Bottom Line
Overall, employers have the upper hand in terms of being able to fire employees and cut their income and benefits. However, there are certain regulations, such as anti-discrimination measures that are in place to protect workers, but beyond this small subset, employers can indeed make cutbacks or changes in the face of regulations or added costs on their businesses.