Employers are allowed to cut or reduce certain types of benefits, but in many cases there are specific laws they must follow in doing so, such as giving adequate notice. If the reduction only applies to a single employee or only some employees, it may fall under discrimination. You benefits may be protected by your employment contract, if you have one. There are also laws which can protect you against losing benefits you have already accrued or vested.
Age Discrimination
The Age Discrimination and Employment Act (ADEA) is the federal law which protects employees who are 40 years old and older from discrimination based on their age. You may also be protected from age discrimination by state and local laws. You are protected under ADEA if your employer has at least 20 employees or if you work for the federal government.
Under ADEA, your employer cannot reduce your benefits based on your age unless your increasing age results in increasing cost to your employer and that cost is not less than the cost for the benefit for a younger employee.
Other Discrimination
Under Title VII of the Civil Rights Act of 1964, an employer cannot reduce your benefits based on your race, color, sex, national origin, or religion. Also, your benefits cannot be reduced due to pregnancy, childbirth or relate medical conditions.
Accrued Benefits
Employers are required by law to provide certain benefits, such as Workers’ Compensation insurance. Most benefits are voluntary, and since they are voluntary employers have the right to reduce or eliminate them. However, your employer cannot simply decide to take away benefits you have already accrued.
Common examples of accrued benefits are paid vacation, sick leave, and other paid time off. Many employers offer paid time off as a reward for staying with the company over time, and employees earn or accrue that paid time off based on weeks, months or years of service. Your employer can choose to reduce or eliminate paid time off, from here forward, but cannot take away the paid time off you have already accrued.