Cam My Employer Lay Me Off and Then Rehire Me at a Lower Wage?

Full question:

A new management took over our company back in May 2009. In June 24 2009, they announced that they're letting us go, and our last day, is 06/30/09. During that meeting, they gave us a choice to apply for this new company to fill the positions open. Almost half of us didn't apply, including me. The other half applied, but some of them didn't get the position. Now, during the last two days before the lay-off (06/30), After realizing i didn't apply, the operations manager offered me to stay, with a higher pay. I declined. There were few of us that they've asked to stay, however, due to the hostile environment, and how this new management treated us, the key people in the company, declined the offer and left.Now, my previous employer only targeted me and reported to EDD, that...yes, there was a lay-off, but we offered her the position and she declined. I believe their main goal is to lay-off and offer lesser pay (i was told by those who applied), and after realizing almost half of us didn't apply. They panicked.Is that ethical to do? To lay-off and re-hire against my will after realizing they made a mistake?

• Category: Employment
• Subcategory: Employment Agreement or Contract
• Date: 04/07/2025
• State: California

Answer:

If an employee isn’t protected by an employment or union contract, they are typically at-will employees who may be fired or given a cut in pay for any or no reason without notice. If a contract, such as a collective bargaining agreement applies, employees may be required to be given a fair warning as to their performance and conduct which might lead to their dismissal, as well as a step-by-step procedure leading up to dismissal. Such contracts may also specify the terms of rehire upon layoff. I suggest reading the terms of any employment contract or union agreement carefully to determine your rights and obligations regarding layoffs, as well as those of the employer.

Generally, as long as an employee is not wrongfully discharged, and the layoff terms of a contract aren't violated, the position may be filled with an employee at the same or a lower wage, unless prevented by wage standards under a collective bargaining contract with a union, prevailing wage laws, etc.

For example, an employee may be wrongfully discharged, in violation of an employment contract, collective bargaining agreement, or for discriminatory reasons based on age, sex, race religion, nationality, or disability. However, an employee who is not wrongfully discharged and doesn't have contractual rights regarding rehire or pay rate may not bring a claim against an employer merely for being replaced by another employee or having his/her pay rate reduced. Whether it is ethical or not is often not a basis for making business decisions, as the budget is often used as the sole determining factor.