I have an employment agreement that guaranteed me a increase (20%) at the end of my first year. The company has so far not responded to my requests to address the issue (it's well past my anniversary.)

There is a clause in the agreement that states I can leave for cause if the company fails to honor the agreement and receive severance.

Now I'm told the company will in fact honor the agreement through today (via a retroactive payout), but that beginning next week I'll be given a wage reduction back to the original level.

If I refuse the cut and they in turn let me go, am I still entitled to the severance?

Would I still be entitled to unemployment?

What other options if any are open to me?

Thank you.

I would have to see the wording of agreement. Sounds like an interesting loophole, give you the raise, but then reduce your salary. I would consult with an attorney. I suspect the company has consulted with their attorneys and think they can justify it legally.