Q - A: Dealing with employee pay after demotion

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 didn't fulfill the required certification?

A demotion means an employer has lowered an employee's status in addition to giving him fewer responsibilities, less pay, and fewer benefits. Your question involves a demotion as a form of punishment for failing to meet the conditions of the promotion.

It's generally illegal for an employer to deny or adjust compensation retroactively as punishment, for any reason at all. Therefore, retrieving back wages out of a demoted employee's salary because he failed to meet the conditions of promotion is likely a form of this so-called punishment, which makes it illegal. You and the employee have agreed to enter into a contract with each other, and you have a duty to pay him under the terms and conditions of the binding employment contract.