From the Hotline: Transferring Employees and Compensation
Question: Can an employer terminate an employee if he refuses to transfer to a new location (5 miles away) unless he is given a salary increase?
Answer: A best practice is to find a mutually agreeable solution. Unless there is some contractual agreement to the contrary (i.e. an employment contract stating the employee cannot be transferred or special arrangements under a collective bargaining agreement), reassigning an employee to a new job in a new work location that does not impact the employee’s pay, benefits, or work schedule with a minimal impact on the commute would be considered a reasonable condition of employment.
The transfer is based on a business requirement, and the decision to adjust pay should be based upon performance or difference in work responsibilities and not necessarily because of a 5-mile change in commute. If this change is causing the employee to find alternative transportation arrangements, then you might consider that in your transfer offer. For example, if the employee could easily take public transportation to the current office but the new office is not available by public transportation and requires the employee to drive his car to the new location, you may want to offer some form of temporary transportation allowance. Similarly, if the employee’s current child care arrangement is located further away from the new work location, you may want to consider flexible scheduling to allow the employee to manage child care.
If the employee refuses the transfer and there is no other work available for him, then the employee has voluntarily decided to separate from the company. As with any termination of employment situation, consult with your labor counsel to ensure that all facts and circumstances surrounding this situation have been considered prior to termination.