Covid-19: We are still open and our employment attorneys are available for you. If you have been forced to work against the government orders or wrongfully fired, call us now. For more information on Coronavirus related employment laws, click here.

The Spitz Law Firm, LLC

Call The Right Attorney

No Fee Guarantee

Coronavirus Law: Can My Job Take My Stimulus Check?

| Apr 8, 2020 | Coronavirus, minimum wage violation, overtime time violation, Practice Areas |

Can My Job Take My Stimulus Check?

Best Ohio Wage and Hour Attorney Answer:  How does the CARES Act work? How much money will I get from the CARES Act? Can my employer reduce my hours because I will receive a stimulus check during the COVID-19 crisis? Can the company that I work for take money from my paycheck because I will receive a stimulus check as part of the Coronavirus pandemic? What can I do if my employer tries to take my Coronavirus stimulus money? Can My Job Take My Stimulus Check?

There is no question, that hard times bring out some of the best in people. All you have to do is look around to see small acts of kindness. From people grocery shopping for their elderly neighbors, to Cleveland Cavalier Keven Love donating $100,000 to help pay the salary of Rocket Mortgage Fieldhouse’s hourly workers. (For more heartwarming stories click here.)

Unfortunately, these hard times of the Coronavirus can also bring out the worst in people. For instance, just the other day one of our employment lawyers had a package stolen from her front porch, in broad daylight, while they were home with her families. Incidents like these are not new or novel, but they are despicable, especially in a time when so many people rely upon delivery for essential products. These types of petty crimes may be on the rise, as some police departments cut back on in-person responses to various crimes in an effort to reduce unnecessary contact between officers and the public. (See cincinnati-oh.gov for more.)

While package thieves are bad enough, there is another troubling trend on the horizon. Apparently, employers have begun cutting employee’s hours, or reducing their pay, in anticipation that the employee will be receiving a stimulus check from the government. Talk about disgusting employers!

As you are probably aware, on March 27, 2020, President Donald Trump signed the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) into law. The CARES act is a $2.2 trillion stimulus package that was meant to help the American economy through the Covid-19 pandemic. Part of the CARES act stimulus package includes a refundable tax credit for many working-class Americans.

Importantly, the CARES act will provide a $1,200 refundable tax credit for individual. If a household filed their taxes jointly can receive up to $2,400. Further, those taxpayers who have children can receive up to $500 for each child. Not everyone is guaranteed the full $1,200. Those who have a higher income will receive slightly less. For people with a yearly income of $75,000 for singles, $112,500 for heads of household, and $150,000 for joint taxpayers, the stimulus money they receive is reduced at five percent per dollar of income, so about $50 per $1,000 earned. For those who make $99,000 for single taxpayers or $198,000 for joint taxpayers will not be receiving a stimulus check under the CARES Act.

This stimulus money is meant to help working-class American employees through the troubling economic time brought on by Covid-19. Yet, some truly awful employers are taking advantage of this stimulus plan and using it as an excuse to not pay their employees. According to a post by Alison Green, a blogger for Ask A Manger, an anonymous employee wrote in, asking:

I work in an administrative role at a national restaurant chain.

I just got off of a conference call with corporate in which they told us that if the U.S. government sends us the proposed stimulus checks due to Covid 19, they plan to absorb the money we receive by cutting our hours to reflect that amount. In other words, if each person receives a check for $1,200, $1,200 will effectively go back to the company. Is this legal?

This is an absolutely disgusting by this company. This nameless employer should be ashamed, and whoever proposed this idea should be promptly fired. By cutting employee’s hours, the employer is defeating the whole purpose of the CARES act for no reason other than greed. Please join me in issuing a collective shame on you!

Unfortunately, while this unnamed employer’s conduct is morally nauseating, it is not necessarily illegal for rank and file hourly workers. This is because most non-exempt employees are not guaranteed any fixed number of hours. Nor are hourly employees guaranteed a fixed wage above that established by the Fair Labor Standards Act (“FLSA”). For more about the FLSA, check out some of our previous blogs: Can My Salary Be Cut Because Of The Coronavirus?, Can Hourly Employees Be Exempt From Overtime? My Job Won’t Pay Me Overtime Wages! What Can I Do? I Need The Best Wage And Hour Attorneys In Ohio!

Now, some employees may have a contract that does guarantee a set number of hours or wage rate, but in an at-will employment state such as Ohio, such contracted employees are rare, but they do exist. If you do have a contract, your best option is to have one of our highly trained employment attorneys review your contract.

If, like most Ohio employees, you are not a contracted worker or an exempt employee, then you are the mercy of your employer – so long as you are paid at least the “minimum salary” for the hours you work established by the FLSA. As it turns out, the Department of Labor (“DOL”) just published a new rule that raises the “minimum salary” from what it used to be at $455.00 a week (which amounts to $23,660.00 per year) to $684.00 per week (which amounts to $35,568.00 per year). For more information on minimum wage, see our previous blogs New Year, New Minimum Wage For 2020!, Overtime Wages: Coronavirus Employment Law Frontlines.

It is disturbing that an employer may reduce an employee’s hours, just because that employee will be receiving a CARES act stimulus check. However, ImageNet Consulting, an Oklahoma City based company, raised the bar on inexcusable acts. According to the Austin Texas news station KXAN, ImageNet told its employees that they would be cutting paychecks by an amount equal to what each employee received from their government stimulus check. As if that wasn’t bad enough, ImageNet also told employees that their pay checks would be further reduced by 50 percent of whatever stimulus amount they received for their dependents, also known as their children. ImageNet referred to this theft as a “Employee Emergency Compensation Program,” and asked workers to sign a waiver permitting the company to reduce their pay, should they receive a stimulus check.

How can a company be so heartless? Not only are they taking money away from their employees, they are also taking money meant to help their employee’s children! One may ask what an employer gains from doing this. The answer is next to nothing. The CARES act stimulus money is a tax rebate, so it is not as though the money is coming from the employer’s pockets. Instead, the employer is simply trying to weasel out a few hours of free work from dedicated employees that are working through a global pandemic. No pun intended, but it makes me sick.

According to the website, The Lost Oogel, ImageNet’s president Pat Russell sent out an email to ImageNet employees saying:

As a result of the few inquiries we have this week, I wanted to make the following points of clarification with regard to the Employee Emergency Compensation Program that was announced and specifically for those employees who have not already sacrificed with immediate pay reductions.

First, the plan will not go into effect until the earliest of April 6th and, there will be no pay reduction for the paycheck received on that date.

Second, it appears that Congress is very close to passing sweeping legislation to provide relief to companies like ours and to individuals. … If we can determine ways to minimize the amount of sacrifice that we have asked everyone to make, we will do so an amend the plan accordingly.

Even after public outcry, ImageNet was unwilling to back down from stealing from their employees! Utterly unbelievable! At best, ImageNet said that they would consider ways to minimize the amount they would steal from their employees as new legislation was passed and clarified.

ImageNet, and employers like it should really take a hard look at their policies, as reducing an employee’s paycheck based on the CARES stimulus runs the risk of violating the FLSA. As we already discussed, the FLSA and corresponding Ohio laws, require that an employee be paid a minimum salary or wage. If the employer’s stimulus reduction brings the employee’s wages below the statutory minimum, then the employer has broken the law. (See Can My Boss Make Me Pay For Uniforms?, Can My Employer Make Deductions From My Paycheck For Property Damage? I Need The Top Wage Theft Lawyer In Ohio!, and Does My Boss Need To Pay Me Minimum Wage? Help, I Need The Best Wage And Hour Lawyer In Ohio To Sue My Employer!)

Further, these employers run the risk of destroying their salaried employees’ exempt status. If the pay withheld from an employee reduces the employee’s income below the FLSA’s $684.00 weekly salary exemption threshold, then the employee is no longer exempt for that pay period. This means that the now non-exempt employee would be eligible for overtime compensation for that pay period. This becomes a regular wage problem and something that our wage theft lawyers have blogged about regularly. (See Am I Entitled To Overtime If I’m A Manager In Name Only?Can My Job Not Pay Overtime By Calling Me An Executive?Do Assistant Managers Get Overtime Pay?Should I Be Paid Overtime Even If I’m A Manger?).

Further, FLSA allows only for prospective salary reductions, rather than reactive or “sham” salary reductions. In other words, your salary can be reduced going forward, but not retroactively during a pay period in which you have already earned the salary. Therefore, an employer may not reduce wages that you have already earned. For example, say you work 80 hours in two weeks, your employer cannot come to you the day before payday and tell you that they are deducting $1,200 from your paycheck because you received CARES act stimulus money. Of course, as ImageNet proves, just because it is illegal does not mean employers won’t try it.

If you believe that your employer is not paying you all of your wages for all of your lawfully earned overtime compensation at a rate of one and half times your normal wages as requires under the Federal Fair Labor Standards Act or Ohio Minimum Fair Wage Standards laws or you are an nonexempt employee that has been misclassified as exempt or independent contractor, contact the attorneys at The Spitz Law Firm today for a free and confidential initial consultation. The wage and hour lawyers at The Spitz Law Firm will provide you with the best options for your overtime pay dispute situation. If you even think that you may be entitled to overtime pay that you are not being paid, Call our office at 866-797-6040 right now. Do not wait. The longer that you wait, the less that your claim may be worth.

Can My Job Take My Stimulus Check?

Disclaimer:

The materials available at the top of this overtime, wage and hour web page and at this employment law website are for informational purposes only and not for the purpose of providing legal advice. If you are still asking, “Am I entitled to overtime?”, “Can my boss make me pay back my stimulus check?”; “My paycheck is short” or “What do I do if my job reduces my pay during the Coronavirus pandemic?”, the your best option is to contact an Ohio overtime attorney to obtain advice with respect to FLSA questions or any particular employment law issue. Use and access to this employment law website or any of the links contained within the site do not create an attorney-client relationship. The legal opinions expressed at the top of this page or through this site are the opinions of the individual lawyer and may not reflect the opinions of The Spitz Law Firm, Brian Spitz, or any individual attorney.