No clawing back wages after promotion didn't work out

Q Thirty months ago, we promoted an individual to a position that requires a special license and included a pay raise. He has repeatedly failed to get his license and, as a result, has never been able to perform the job we hired him to do. We have demoted him. Are we able to retrieve back wages for the pay raise he received since he didnt fulfill the required certification?

An employer may claw back wages from an employee in some very limited circumstances, but this isnt one of them. Even when a claw back would be permitted, its possibility would need to be spelled out very clearly in an employment contract. For example, when a company knows it will invest significant time and expense in training and educating a new hire, it may require her to work for a specified period and allow for some reimbursement if she quits before serving the term. But that doesnt sound like what happened here. You agreed to pay the employee an increased wage knowing he wouldnt be licensed for some time and accepted the risk he would fail to earn the license required by the promotion.

In the future, I recommend telling employees their pay raise will occur upon obtaining the license, not before. That will protect you from such situations and motivate employees to get licensed as quickly as possible.

Eric Loman is an attorney with Jackson Loman Stanford & Downey, P.C., in Albuquerque, New Mexico. You can reach him at eric@jacksonlomanlaw.com.