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Is It Legal to Give an Employee a Pay Cut

Employee pay cutReducing an employee’s pay is no minor thing. A pay cut can be anything from illegal, financially troubling, emotionally unsettling, to devastating. Before cutting an employee’s pay, employers should consider the effects. Sometimes the repercussions aren’t worth it.

When a Pay Cut Is Acceptable

In some situations, employees accept the change, like when everyone in the company or department is getting a pay cut for the benefit of the business. In other case, employees welcome it, like when they want less responsibility. And sometimes, a pay cut is intended to get employees to quit. There may be better ways to go about this, but at least in this case the effects align with the intentions.

When a Pay Cut Really Cuts

Most of the time, employees don’t see a pay cut in the same light as their employers. Thoughts usually circle back to, “This isn’t fair” and, “Is this even legal”.

In a recession, or any time a company is struggling to survive, a pay cut might be a valid strategy to keep the business afloat. Loyal employees may be sympathetic and willing to hang on through the hard time, that is of course if upper management is also taking a pay cut. If the reason is to line the pockets of upper management, though, employees won’t take kindly to the company hardship.

Reasons employees don’t appreciate

  • Corrections to what might have been a poor choice in original salary
  • Complaints by other employees about one employee’s rate
  • Realization that the employee is overpaid for the location or job description
  • Cash flow problems, if upper management doesn’t also take a pay cut

Mortgage and other bills

When employees buy homes, lenders base their loans on their income. Employees also buy cars, sign up for classes, school, and all the other things that cost money. Most people live according to how much money they make, so when that gets cut, hardship presents.

Emotional effect of a pay cut

A pay cut speaks a thousand words and those words usually hurt. Unless your objective is to get an employee to quit, be aware that a pay cut may prompt a job hunt. Even if it’s not true, employees usually see the pay cut as a demotion or take it as a hint that they are not appreciated. In either case, they will leave at first opportunity. If you really value the employee and want them to stay, you might be better off just swallowing those few extra bucks per week and instead tell the employee that you cannot offer a raise this year. While that’s never fun either, it’s not as hard a blow as a pay cut.

When a Pay Cut Is Not Legal

Most of the time it is legal to reduce an employee’s pay but there are some instances in which it isn’t.

  • Surprise – A surprise pay cut is illegal. Employers are obligated to pay employees the agreed-upon rate. If employers wish to change that rate, they can do so but first employees must agree to it. If they choose not to agree to it, they can discontinue service with the company. But employers cannot tell employees that the paycheck they already worked for is going to be smaller than expected.
  • Retroactive – Employers also don’t have the right to tell employees that their pay rate is changing and that the rate is retroactive some number of days. The pay rate can only change for any time after informing the employee.
  • Retaliation – If an employee complains about sexual harassment or other inappropriate office behavior, the employer cannot lower her pay rate in retaliation. It is not the right way to deal with this situation and retaliation is against the law.
  • Discrimination – Pay rates cannot be lowered based on race or gender. For example, if the company is struggling, the employer cannot legally cut the rates of all female employees to improve cash flow.
  • Breach of Contract – When employers have a contract with employees, they have a duty to pay them a certain rate for a certain amount of time. Once this time period is up, the employer can notify the employee of the pay cut and renegotiate the contract.

Additionally, regarding employee classifications, hourly employees must always make at least minimum wage, even after a pay cut. Exempt employees rates of pay cannot fluctuate. In other words, you couldn’t ask your exempt employees to take a pay cut during the slow months. If you needed to do this, you would have to switch the employee from salary to hourly.

107 Comments

  1. Suza
    Suza May 3, 2018

    I was injured wile on duty, company increase hour and want to cut my pay, but am not incompetent,nor misconduct,am productive

  2. Itumeleng
    Itumeleng March 3, 2019

    This page is fraud, not in south africa there are steps to be followed before something can be legal here in mzansi, employers can not wake up tomorrow and say he/she wants to implement pay cut to employees, give us sections in labour law, this page is misleading employees not to stand for their rights.

    • timesheets_blog
      timesheets_blog March 12, 2019

      Itemeleng, This post was written in the US, primarily for US customers. Laws in your country may be different.

      • Nick
        Nick February 19, 2020

        Can an Employer change commissions in the middle of the month? We started the month with one pay plan and on February 14 pay plans were changed effective immediately.

        • Lindsay Sommers
          Lindsay Sommers February 20, 2020

          It looks as though the Department of Labor doesn’t have regulations in regards to the change of commissions; however, usually employers present employees with a contract letting them know about commission changes. I would suggest speaking with the Wage-Hour division for help: 1-866-487-924

      • Cindy Elsberry
        Cindy Elsberry March 24, 2020

        Our employer in the state of GA cut employees pay and made it retroactive – 20-50% pay cuts for hours already worked. One of my co-workers called the GA Department of Labor and the individual they spoke with told her that it’s legal in GA to make pay cuts a surprise and/or retroactive. Did she speak with an idiot or is that accurate for Ga?

        • Lindsay Sommers
          Lindsay Sommers March 25, 2020

          That doesn’t sound correct. I would suggest that you make another phone call to the GA DOL to clarify pay cut rules.

    • David Darrell Grace
      David Darrell Grace July 16, 2019

      I work at a company where the security company has changed four times in 10 years now the company AUS wants to cut the pay I have earned to $14 per hour from $24.00 without notification they said they just discovered after 11 months. Is this legal

      • Lindsay Sommers
        Lindsay Sommers July 18, 2019

        This depends on if you’re an hourly or salaried employee. According to the DOL, The FLSA requires that all covered non-exempt employees receive at least the applicable Federal minimum wage. The act allows employers to lower the employee’s hourly rate, as long as it doesn’t go below minimum wage.

        • Dave
          Dave August 8, 2019

          My boss told me he would pay me 15.50 and hour if I work m-f but if I miss a day he drops my pay to 14.00 hourly is this legal

          • Lindsay Sommers
            Lindsay Sommers August 12, 2019

            Hi Dave. Based upon research, it looks as though an employer is allowed to adjust an hourly rate as long as he does not violate minimum wage or overtime regulations. You have a unique case, so I would suggest speaking with someone from your local labor board or a legal counsel to see if you have a case.

        • Gerad
          Gerad December 7, 2019

          My boss was just paying me 15.50 an paid me 3 checks month an a haf an calls an said we got someone else’s pay an my pay is going down to 14 a hour basicly he giving the money to the guys that are always late popping pills milking the clock adding time and hours an the boss knows it an I’m there fall guy

  3. Bruce H.
    Bruce H. March 31, 2019

    My employer see you there my wages almost in half without telling me before hand. It was only after I’d completed my work and my paycheck came in that the reduce in pay was evident. Is that legal? If so, what sort of recourse do I have? Would it be retro? Do I need a maritime lawyer?(I’m a mariner)

    • Lindsay Sommers
      Lindsay Sommers April 2, 2019

      Under FLSA protection, hourly employees at least need to make minimum wage for their hours worked. You may want to make sure that you are at least making the minimum; if not, then you may want to consider speaking with your supervisor about the issue.

      • Jane Doe
        Jane Doe December 7, 2019

        Wouldn’t the employer need to discuss the pay cut prior to doing the pay cut?

        • Lindsay Sommers
          Lindsay Sommers December 9, 2019

          An employer should let the employee know if there is going to be a change in pay. If it’s unexpected (a surprise to the employee), that’s not legal.

        • Mary
          Mary February 2, 2020

          I was going through some old paperwork looking at tax returns and such and came across some paperwork from my job and realized I had received a reduction in hourly pay without being notified. This dates back to 2012. Is there a time limit for getting compensated. I didn’t ever look at the stub I guess I just trusted the payroll person. I noticed it today. It was a $3.00 reduction.

          • timesheets_blog
            timesheets_blog February 5, 2020

            The company can pay you whatever they want. There’s no law that says they can’t reduce your pay. It’s up to you to accept that rate or not accept it. If you have a contract spelling out that’s your pay rate then that would be different.

      • Lacy mead
        Lacy mead March 22, 2020

        Can my pay be cut due to the virus and what is going on now in the world? They said our pay cuts are 20% and I live in NC.

        • Lindsay Sommers
          Lindsay Sommers March 25, 2020

          An employer can give you a cut in pay as long as they notified you prior, the pay cut isn’t discriminatory, your pay isn’t under minimum wage, and if the paycut doesn’t breach any contracts. For more clarity in regards to the legality of this situation, I suggest speaking with your local labor board.

  4. Anna
    Anna April 19, 2019

    My employer cut my wages to minimum wage rate and made it retroactive to apply to hours already worked because i quit. This was done hours before my pay check was scheduled for direct deposit and came as a surprise. I know it is legal to cut wages for hours not yet worked, BUT what about for hours already worked?

  5. Steve Ballman
    Steve Ballman May 3, 2019

    In Kansas, my pay rate was changed due to an absence policy. So it was a policy set in place ny the company about missing a certain ammount of hours and losing an entire 60 cents per hour.

    My pay rate was changed during a period but I was not notfied until I was paid for two weeks of work, at the lower rate.

    Was this illegal by them?

    • Krystal
      Krystal December 5, 2019

      So they gave me a pay cut at work starting monday for 2 weeks (10.75 to 8.60) equalling to 2 days worth of work (monday to friday for 8hrs each day) but im working overtime saturday which is over 40 hrs (one week) . Do i make 12.90 or 16.13?

      • Lindsay Sommers
        Lindsay Sommers December 6, 2019

        Your overtime rate is normally 1.5 times your normal rate of pay. If your rate of pay is $8.60, then your overtime pay rate will be $12.90.

  6. A Seratte
    A Seratte May 15, 2019

    My husband’s worked at same job for same pay for nearly 15 yrs and makes a flat hourly wage (no raises) and commission on gross profit of department. Management just made him sign a take it or leave it reduction in that commission basing it on accessories instead of all sales. Pay cut this month for first check under the new commission rate is $1500, which amounts to 12-18K per year!!! We can’t pay our bills on that much of a reduction and he’s over 62, so it seems to us like they’re trying to force him to quit. Also reducing his pay reduces what they would pay for workers comp if he’s laid off and increases their own pay as they get paid off net profit – the less paid to employees the more upper management makes! This is unethical and I’m sure it’s discrimination. But is it legal?

    • timesheets_blog
      timesheets_blog May 20, 2019

      This is absolutely a question for a labor attorney and definitely us, as we cannot provide this kind of advice. a consultation with one may be in order.

  7. Tim Reed
    Tim Reed June 4, 2019

    My company made a new policy that if someone gets too many points,they give them $3 less an hour for sixty days, with no missed or late days or they’ll be terminated. After the 60 day period, the pay goes back to normal. Is that legal??

    • timesheets_blog
      timesheets_blog June 5, 2019

      This is a good question for your local labor board. Let us know what they say! I don’t think it’s illegal, but that’s a guess. The company isn’t obligated to pay you any specific amount unless you’re under contract with them. Do you have a contact specifying your hourly rate of pay? I’m not sure new policy would be enough to allow changing a contract – if you had one. But without a contract, the company is probably free to do as it wishes.

  8. JD
    JD June 21, 2019

    I took on a new role last April in 2018. My employer told me to do the job for six months and they would reevaluate what it was worth. After six months they gave me a raise. That was in October 2018. Now, in June 2019, they are telling me they reevaluated what my job is worth and they’re saying I’m overpaid for my role. So they want to reduce my pay by over double what the original raise was for back in Oct 2018. So my new pay is even lower than what I made when I saw initially accepted the job. Nothing has changed in my job description or role except I have a new boss and the company is reducing costs. This doesn’t seem right but I don’t know what I can do because HR is on my bosses side trying to legally justify that this is OK. Any suggestions?

    • timesheets_blog
      timesheets_blog June 24, 2019

      It doesn’t sound like you signed a contract that specifies your pay. In that case, they can lower your salary any time they want. They just can’t do it for time you’ve already worked at the old rate. It has to be AFTER they tell you that the new rate applies. You’re welcome to accept it, or quit, but unfortunately those are probably your only good options. You have to decide if the job is worth it or not.

  9. JD
    JD June 21, 2019

    I also am in a unique job that was covered by 2-3 people in the past. So there’s not really any internal comparison. But HR is saying I’m paid more than my peers in the “same role.” Not a fair comparison at all. I am fine with them taking back the raise, but not reducing it further. What do I do?

  10. Michelle
    Michelle July 20, 2019

    Our company has been sold again – twice in three years. I think the new owners will be cutting wages again. I am a salaried department leader – can they cut my wages substantially and cause me financial harm? If they do and I don’t accept, am I eligible for unemployment? I live in Ohio. Thank you!

    • Lindsay Sommers
      Lindsay Sommers July 29, 2019

      Hi, there. According to the Ohio Department of Job and Family services, you need to meet these certain requirements to be eligible for unemployment benefits.

    • timesheets_blog
      timesheets_blog July 29, 2019

      Since an employer can adjust your pay rate at will unless you’re under some kind of contract, you might not be eligible for unemployment if you voluntarily quit. You’ll need to find the proper legal answer to this question elsewhere. That being said, it’s not usually a good idea to demote or pay employees less since it causes employees to be less than supportive of the company’s goals – to say the least.

    • MIKE JONES
      MIKE JONES August 28, 2019

      I recently made the decision to leave my job. My employer, courted me back with talk of what i do for the company and how I couldn’t be replaced. I was also offered an higher rate of pay. I agreed. Over the next few weeks my duties expanded to which I embraced. 2 months later my employer stayed we needed to talk about my rate. I started that I stayed due to it meeting my financial needs even though I could have left for more money. 2 weeks went by with no conversation but it was mentioned again. On Thursday 8/22/19 I was told.my pay was reduced by $3. I chose to resign. We shook hands and agreed Friday 8/23/19 would be my last day. On my way home I recieved a text stating we should make it effective immediately and I need not work Friday.
      Friday 8/23/19 [ picked up my paycheck for the week of 8/12-8/16/19 and the amount had already been changed. I haven’t done anything as of yet, not even unemployment. Is this legal or a normal.practice? What are my options or what direction should take this ?

      • timesheets_blog
        timesheets_blog September 6, 2019

        Generally an employer should not reduce your pay retroactively. I would discuss it carefully with your former employer before taking any other action.

  11. Anonymous
    Anonymous July 23, 2019

    9 months ago, I was promoted and signed a contract with a specific pay rate listed, but no length of time in the position stipulated. My company just got a new COO a few months ago (I’ve been with the company since 2007). I was just informed that my position is being eliminated to make room for a friend of the new COO. My options are to resign with severance, or go back to my old position with a $10,000/yr pay cut from what I am currently making. I am employed in Louisiana, but the main office of the company is located in Texas. The two employees above me (and below the new COO and his incoming friend) have not been demoted or received a pay cut. All parties involved are male, and I am female. Is this legal?

    • timesheets_blog
      timesheets_blog July 29, 2019

      You’ll have to speak with a proper legal authority for the answer to this. Contract law is, well, contract law and a bit beyond the help we can provide. Good question though. You can also try asking the community on our forums. https://www.timesheets.com/forums.

  12. Matt G
    Matt G August 11, 2019

    I just recently took a pay cut of almost 40%. No one else in my dept. got a pay cut. I manage a route doing pest control. My manager informed me of my route cut and told me everything will be adjusted so I can continue to make what I was making. After I got my check and saw the 40% decrease in my pay, I reached out to HR asking if it was correct and they said they miss paid me by $30. I feel like I was targeted due to being the only employee to have a pay cut. Any suggestions what I should do?

    • Lindsay Sommers
      Lindsay Sommers August 13, 2019

      Unless you feel as though you were discriminated against based on race or gender, or if the pay cut was a surprise, your employer can make the choice to give you a paycut. If you feel as though you are being treated unfairly, you may want to speak to a legal counsel to see what your options are.

  13. monique
    monique August 28, 2019

    Hi My company is trying to cut my salary and put me on hourly. Can i not accept their offer and have them lay me off?

    • Lindsay Sommers
      Lindsay Sommers September 5, 2019

      Yes, you can negotiate a severance with your manager/employer. If they agree, they can decide to lay you off.

  14. Tammy
    Tammy September 12, 2019

    My employer (Missouri) recently cut my over time rate without notifying anyone that it was changing. I have the email that increased our overtime or “crisis” rate for working extra hours. When I went to accounting to dispute my pre tax pay I was informed that it had changed 2 pay periods prior to the one I noticed it on. I work a lot of overtime/crisis hours and we never get a pay stub that breaks down our hours and rates for those hours so that is how they got it by me the first 2 times.

    • Lindsay Sommers
      Lindsay Sommers September 17, 2019

      Hi there. Upon my research, Missouri’s law states “Employers must pay at least one and one-half times the employee’s regular rate of pay once overtime pay is in effect. Overtime pay begins once an employee works more than 40 hours in a work week rather than more than 8 hours in a work day. State and federal law does not allow employees to voluntarily waive their rights to overtime pay and accept straight time instead. Any employer that asks an employee to do so violates the law and employees should​ file a wage complaint.” That being said, any hours worked over 40 hours in a work week must be 1.5X your normal pay rate.

  15. Cheri D
    Cheri D September 17, 2019

    My employer told me i am being paid too much compared to others in the office. When i started we had an agreement on a salary and commission %. It’s been 4 years and now he said he won’t pay me a salary and commission but will adjust my salary. There were also discrepancies in previous paid commissions. When i advised the money due me he said since you were overpaid those commissions are a wash now. My questions are: 1. Is he allowed to not pay me the back commissions? 2. Is there a time frame or notice that I am supposed to get before he can change my compensation package? 3. Commissions are paid out 2 months after they are earned. Is he still required to pay me on the monies I have already earned before he puts the new compensation package in place?

    • Cheri D
      Cheri D September 19, 2019

      I am also located and work in Illinois

  16. Kimberly
    Kimberly October 5, 2019

    I just recently left my job that i had been at for over 7 years. My checks have always been direct deposite. I just recieved my a paper stub from my last work week and noticed that my pay was cut about a dollar an hr. I was never told that they were cutting my pay! It was never a conversation or anything!! I looked at a stub from a few months ago and it was also at the lower amount. Can they do this???

    • Lindsay Sommers
      Lindsay Sommers October 7, 2019

      You are supposed to be notified about a change in pay. Most likely, your employer will have to give you backpay for all of the hours you didn’t receive the extra pay. I would suggest talking to your HR department.

  17. Pedro Ponce
    Pedro Ponce October 29, 2019

    I work for a company where I get paid salary plus commission. It Is rumuroed thst beginning of next year, january first, they are taking my ability to make commission, and just pay me salary. It would be a greater salary than I have now, but it could cost me roughly $30K less due to my inability to make commission. Most in my position will get a pay increase, but that is because they don’t sell nearly as much as I do. Is this conaider a surprise since they would just be implanting this without asking or running it by those who would be affected, and thus, illegal!?

    • Lindsay Sommers
      Lindsay Sommers November 10, 2019

      Your employer will have to speak with you about the wage change, although a wage change is perfectly legal. You can call the DOL Wage and Hour Division at 1-866-487-9243 to see if this is something should be of your concern.

  18. Pastapinata
    Pastapinata November 7, 2019

    My boss had a little meeting in the beginning of the year and said that our commission will start at 28%, and will go up to 30 (the max) if you are in time for the week… but if you are late one day then it decreases 2% for that week and you can go down to lowest of 24%. So usually and for years now we’ve been paid 30% max always. Now 3 months later after nobody has spoken a word about this rule, I find out that he has been paying me at a quickly diminishing rate and stood at 24% now for almost 3 months. Is this legal, because in my eyes I believe I should have been notified of my pay decrease. Since then he had very begrudgingly agreed to pay me the difference up to 28%. And he thinks he is like a god because he’s so generous for doing that. Was this legal?

    • Lindsay Sommers
      Lindsay Sommers November 10, 2019

      Commissions are a bit different than normal wages, however, most state laws will count commissions as an addition to a wage. Employers cannot typically change someone’s wage without their knowledge. Speak with your local labor board as soon as you can, because you may have a limited time to file a complaint and a report.

  19. Erin
    Erin November 10, 2019

    Hi lindsay. I was wondering how much advance written notice they have to give before the pay cut goes into effect (along with a signed pay rate form)? Or could it literally be the day before (or even hours before) the start of the shift? Is it a week? 10 days? Before you are scheduled for that week? (I am in the hospitality industry in NYC.) Thanks!

    • Lindsay Sommers
      Lindsay Sommers November 13, 2019

      Hi Erin. Your employer must notify you as before any substantial changes to your wages, however, I’m not certain about the specific time frame for NYC employees because the answers seem to be unclear. It might be possible that the new wage takes place immediately after agreement, but unfortunately I’m unsure. To be certain, I would suggest that you speak with your local labor board because they’ll have a clear understanding of NY employees’ rights and regulations.

  20. on time but tired of threats
    on time but tired of threats November 12, 2019

    there’s a mandatory pre-work meeting and employees have been told to be in attendance by x-time. if employee fails to show on time, wage will be permanently lowered. legally, how can an employer get away with such a threat?

    • Lindsay Sommers
      Lindsay Sommers November 13, 2019

      If you are a salaried employee, your rate should stay the same no matter how many hours you work in the week. This means that your employer can technically require you to go to meetings outside of work hours, however they cannot reduce your pay. When it comes to hourly employees, the FLSA doesn’t preclude an employer from lowering an employee’s hourly rate. As long at the new rate is at least minimum wage, the employer can reduce the wage. Additionally, most employees are hired “at will”, which means that those employees don’t have a formal employee contract and are not covered by a bargaining agreement.At will employees can be terminated, demoted, and have hours reduced or pay lowered by the employer. If you have an agreement with your employer, they will have to notify you about a pay change. If they don’t, it’s a breach of contract. If you are still concerned about your rights, I would suggest speaking with your HR department or your local labor board.

      • on time but tired of threats
        on time but tired of threats November 19, 2019

        thank you, for the timely response. the meeting came and went……just as did the threat to reduce pay, as two co-workers were either late or not present at all without tardiness/absence notification. this is not the first time such a threat has been made, only louder and longer. i do believe that some contact with the labor board will ensue, as numerous co-workers are just plain tired of low wages, inconsistent environment and overall “blame-the-nearest-non-family-member-employee” attitude of a family business. collectively, we enjoy the work and the people, but there needs to be some compensatory improvement. a one dollar an hour increase in pay after nearly two decades of devoted service doesn’t really cut it. most of us need multiple other jobs just to survive from paycheck to paycheck. yet another family “small” business sticking it to the folks that put them on easy street. go figure.

        again, thank you.

  21. Brenda
    Brenda November 15, 2019

    Good Morning, Lindsay. I have an awesome and dedicated employee at my small business. I can not afford to pay overtime so I have hired two other part-time employees to cover the hours. My awesome girl is designated to make out the schedule and, knowing that I can not pay overtime, still gives herself several hours of overtime each week. For instance, I pay bi-monthly and she voluntarily worked 99 hours this pay period. the job is extremely easy … it’s basically sitting the majority of the time and watching over things. During a 9 hour shift I would guess she would take a free soda or bottle of water to approximately 8-10 guests. She can spend most of her time on the computer or cell phone with personal matters, eat and take smoke breaks at any time she chooses and as often as she wants. She, being awesome, doesn’t abuse the freedom, it’s just that so much of the time there are no guests at all so it leaves her a lot of free time. She loves her job and wants to be here. As stated, she chooses to work the extra hours, rather than give them to another part-time employee. I’m in Illinois and I pay her $9.50 an hour. From what I am reading here, this is not legally ok. Is there anything we can legally do to make it ok?

    • Lindsay Sommers
      Lindsay Sommers November 21, 2019

      Hi Brenda, I may be a bit confused by your question, so forgive me if I don’t answer properly. What exactly is you question here? Are you asking if you are able to cut her hours? if so, I don’t see why that’s not a possibility. If scheduling is an issue with this employee, maybe you should consider creating the schedule yourself or having another employee create the schedule. When you gain more control over the schedule, overtime should most likely become less of an issue. Additionally, you can also try limiting when she can clock in and clock out. Timesheets.com, for instance, has overtime controls that allow you to stop employees from clocking in before a certain time, you can limit lunch time, and you can also control clock-out times. As an employer, you can create the schedule and cut hours, as long as you’re paying her at least minimum wage and paying her for overtime. For additional information from the FLSA: “The FLSA requires that all covered non-exempt employees receive at least the applicable Federal minimum wage for all hours worked. In a week in which employees work overtime, they must receive their regular rate of pay and overtime pay at a rate not less than one and one-half times the regular rate of pay for all overtime hours. The Act does not preclude an employer from lowering an employee’s hourly rate, provided the rate paid is at least the minimum wage, or from reducing the number of hours the employee is scheduled to work.” I hope that helps!

  22. Paul Baker
    Paul Baker November 17, 2019

    So the company I work for has been sold to another person can they cut my wages. Just want to make sure I’m not getting taken advantage of worked here for over 1 year and they have cut my hourly wage by 30% I live in Iowa

    • Lindsay Sommers
      Lindsay Sommers November 22, 2019

      If there isn’t a contract with your rate of pay stated clearly, the new business that implemented the acquisition can legally cut your wages.

  23. Vincent Gomora
    Vincent Gomora December 9, 2019

    I’m paid hourly in Virginia I get 11.50 I was late 30min to work one day I was at fault but my employer changed my rate for the whole week to 9.00 is this legal? It was changed back to 11.50 for the next week but we are told if we are late or miss a day or call out are rate for the whole pay period will be reduced to 9.00.

    • Lindsay Sommers
      Lindsay Sommers December 11, 2019

      Employers are allowed to reduce an employees pay in most cases. If you and other employees are aware of the pay cut policy, it’s technically legal because it doesn’t count as a “surprise”. It looks as though Virginia doesn’t have regulations regarding decreased pay, so your employer is most likely allowed to take such actions as needed. I would suggest speaking with a legal counsel or your local labor board in regards to see if this is legal.

  24. Brad Brecht
    Brad Brecht December 24, 2019

    Can a company cut the pay of just one employee, and not the resat of the workforce

    • Lindsay Sommers
      Lindsay Sommers December 24, 2019

      Technically an employer can cut any employee’s pay at any time. If it isn’t a case of discrimination, it’s legal to cut an employee’s pay.

      • Brad Brecht
        Brad Brecht December 25, 2019

        So an employer CAN cut the pay of one employee and not the rest of their employees? Even though there was no demotion?

        • Lindsay Sommers
          Lindsay Sommers December 31, 2019

          Most employers can reduce an employee’s pay as long as: 1) they tell the employee first 2) It’s not a case of discrimination 3) The pay cut isn’t breaching a contract 4) the pay cut doesn’t reach below minimum wage. Yes, you are the only person who got a pay cut, but can you prove that it was because of sex, gender, age, race, etc. Most of the time, if you can’t support your case, then it’s legal. I would suggest speaking with someone about a worker’s discrimination case, preferably one who is familiar with the law and can provide legal help.

  25. Day Tona
    Day Tona January 2, 2020

    I began a new job 4 months ago and was offered $16.58 per hour. I accepted this part time position. However, during the holiday I was asked to work a few extra hours which I was happy to do so. Upon viewing my paystub online I noticed that it was over $223 less than expected. I then viewed my paystub throughly and noticed that my pay rate was lowered to $10.75. I’m so confused can they change your pay without notice. This is not the rate I agreed upon. For 4 months I’ve been paid $16.58 per hour.

    • Lindsay Sommers
      Lindsay Sommers January 7, 2020

      According to the FLSA, “The Act does not preclude an employer from lowering an employee’s hourly rate, provided the rate paid is at least the minimum wage, or from reducing the number of hours the employee is scheduled to work.” However, it sounds like your situation was a surprise, which is not legal in most cases. You should bring this up with your HR department or seek legal advice from a qualifying representative.

  26. Diane
    Diane January 3, 2020

    My employer reduced my hourly rate to offset paying overtime pay without telling me. We agreed to a set hourly rate when I first started. Two weeks after he stated he doesn’t pay overtime. 3 months later is when he changed my hourly rate to offset overtime y. Is that legal without notifying me of the decrease in my hourly rate?

    • Lindsay Sommers
      Lindsay Sommers January 7, 2020

      Your employer shouldn’t typically be able to reduce your pay without a warning. I would suggest speaking with your HR department or a legal counsel.

  27. Susan Virden
    Susan Virden January 5, 2020

    My company is reducing the pay rates of all the receptionists and reducing some from 5 day work weeks to 3. Are the required to inform employees what their new hourly wage will be?

    • Lindsay Sommers
      Lindsay Sommers January 7, 2020

      Your employer is legally allowed to give you a paycut with a new wage, as long as your new wage doesn’t fall below minimum wage. If you salaried, it’s usually customary that your employer tells you about your new wage, but you’re an hourly employee. If I were you, I would speak with your manager or HR department about your new wage.

  28. John Kennedy
    John Kennedy January 7, 2020

    My agreement upon accepting a job was 16 an hour plus 75 non tax reimbursement a week. They took the reimbursement away from my pay without notifying me prior to that? Is that legal? I am in Pennsylvania

  29. Bec
    Bec January 12, 2020

    Ok I have a couple questions I get paid hourly at a non profit business and they say that the law doesn’t require them to pay over time. I’ve tried to research this but I don’t see any where that non profits aren’t required to pay time and Half for overtime. Is that legal? In addition I took a pay cut of ten percent but it was due to the fact that I was demoted. The only problem I have is that I was demoted over six months ago without any cut in pay then it just happened on my paycheck yesterday. My boss said a few weeks ago that upper management was complaining about how much I make but at no time was I told I would receive this large of a pay cut or when to expect it I understand it’s not legal to surprise an employee with a pay cut, but what steps should the employee take moving forward?

    • Lindsay Sommers
      Lindsay Sommers January 13, 2020

      The FLSA requires all employees to get paid at least minimum wage along with proper overtime calculations (1.5X 40 hours every workweek). Additionally, your employers are supposed to notify you when a pay cut is being made. I would suggest speaking with a legal representative at your convenience or contact the DOL wage and labor violations department.

  30. Don Goodyear
    Don Goodyear January 13, 2020

    For the past three years I have been working as a supervisor for 12 hours a day. The last year I’ve had health issues and have been seeing a cardiologist. Recently, I’ve told my boss that I can’t keep up these 12 hour days from 8am to 8pm Monday thru Friday due to my health issues. I offered to work from 12 noon to 8pm. He told me if I couldn’t work 12 hour days he would lower my hourly rate. Now when I started this position he told me I was kinda salaried. So can he pay me a lower hourly rate due to health issues?

    • Lindsay Sommers
      Lindsay Sommers January 14, 2020

      Hi there. First, I want to address that you can only be a salaried or an hourly employee– not both. Now that being said, salaried employees get paid no matter how many hours they work during a pay period; however, they get paid based on the assumption that they will work a certain amount of hours each week. On the other hand, hourly employees get paid based on how many hours they work during a pay period. Technically your employer can legally give you a pay cut if it doesn’t breach any written contract, if you’re an at-will employee, and if the pay cut doesn’t make your pay fall below minimum wage. However, since you have health issues, this may be a problem with the DOL. I would suggest speaking with The Wage and Hour Division. You can visit their webiste http://www.wagehour.dol.gov or call their toll-free help line, available 8 a.m. to 5 p.m. in your time zone, at 1-866-4US-WAGE (1-866-487-9243).

  31. Sharon
    Sharon January 22, 2020

    My daughter is only 22 and is fresh out of college. She started her job in November and her hourly rate was told 12 an hr. Then she had her 1st valuation at the beginning of January and everything was fine they told her to keep the good work. Then this week they pull her in the office telling her that they are reducing her pay to 10 hr because of hear say of other women saying she is not doing things properly on x-rays which shes has not been trained she was just thrown in a position that she never learned in school. She did however resign because the commute is to far for that pay and not to mention she has a college degree. They had no facts other than hear say. Is this legal.

    • Lindsay Sommers
      Lindsay Sommers January 29, 2020

      Under FLSA regulation, employers can reduce pay or cut hours for an employee at any time as long as the employee is at least getting paid minimum wage and obtains overtime after 40 hours in a workweek. I can see how it seems unfair that they reduced her pay without proper documentation, but in most cases, an employer doesn’t need to necessarily provide a reason for reducing someone’s pay. I would suggest seeking advice from a legal representative or speaking with the Department of Labor to see if you have a case.

  32. Beatriz A Parra
    Beatriz A Parra February 20, 2020

    I work at Dr office and we will be join another group of Doctors our manager is going to cut our salary most of us have worked for them over 13 years and we will stop seen patients march 20 but she has only said we are moving she has not said to any one else what’s going on only to 1 person not really letting is know what’s going to happen she wont talk to us I only know this info fr on another recourse it has been stressful for all of us because she does not have a formal meeting to let us know what’s going to happen please help

    • Lindsay Sommers
      Lindsay Sommers February 20, 2020

      There’s a potential that your company is going through changes, which could explain why there’s been a lack of transparency among supervisors and employees. If companies go through drastic changes, there are a lot of things that need to be taken care of on the back end before letting employees know what is going on. They will most likely communicate with you soon in regards to what is going on, however, it doesn’t hurt to potentially speak with a supervisor to see what is going on.

  33. Jai mitcheam
    Jai mitcheam February 23, 2020

    I have been at my current job for 3 years. After the break for Christmas we came back and more work was added to the job for the same pay with no notice. After a few months we got compensated for the extra work but now in the middle of the pay period (we get paid biweekly so at the start of the second week) we were notified that effective immediately no compensation would be made for the extra work including what had already been done . Is this legal?

  34. Al Lozzano
    Al Lozzano March 4, 2020

    Hi – I would welcome any help on this matter. I was hired on at a company to manage accounts, I was paid for sales within those accounts a commission. A sales person from another area quit and the company hired from within. The person they promoted was making a little over minimum wage at the time, the company could not justify to themselves increasing her base salary to the base amount that the other sales team were making. So the company ” re-aligned” the territories and customers in them so that she would be making more money on her commissions every month to offset the lower base pay. Sounds fair – right?? I thought so too until I realized that the offset dollar amount was coming from customers that were once part of my territory and now I am getting less money on my commissions. Is this legal?? It certainly isn’t fair.
    What happens if they increase her base salary in a year, I asked and I still would not get the customers back or the money.

  35. Maria R. Guinto
    Maria R. Guinto March 8, 2020

    I am a full time employee and went on disability for 2 weeks and my Dr Note said I could go back to rugular duty., but when I came to work my days are cut, instead of 5days now is 3days. can my employer cut my working days when coming from disability? there reason is over staff.

  36. Tiffany
    Tiffany March 20, 2020

    Does my employer have to put the salary cut in writing to all employees? Our company is supposed to be taking a 30% pay cut across the whole company starting April 1, 2020.

    • Lindsay Sommers
      Lindsay Sommers March 25, 2020

      Some employers are allowed to give a pay cut verbally rather than in writing. I would suggest speaking with your local labor board about your state laws– they will know whether or not a verbal notification is acceptable or not.

  37. Jerry P
    Jerry P March 20, 2020

    Just got an email saying that all employees’ pay is being cut by 30%, which will be reflected in the next paycheck (Mar 31). Didn’t sign or agree to anything. The pay period of this next paycheck is Mar 14 to Mar 31, which means this whole week (Mar 16 to Mar 20), I unknowingly worked for 30% less money. Totally illegal right?

    • Lindsay Sommers
      Lindsay Sommers March 25, 2020

      An employer is legally allowed to reduce a non-exempt employee’s hourly rate, as long as the new rate is not below minimum wage. Additionally, pay cuts are legal for salaried employees as long as your employer notified you about the pay cut beforehand. Since you worked at an unknowingly new rate and your employer told you retroactively, I would suggest that you file a complaint with your state’s department of labor.

  38. Brent
    Brent March 22, 2020

    Is it legal to give employees a 50% pay cut,I am aware of the paycut

    • Lindsay Sommers
      Lindsay Sommers March 25, 2020

      An employer can cut an employee’s pay at any time. A paycut is legal as long as you are notified prior, the pay cut isn’t discriminatory, your pay isn’t under minimum wage, and if the paycut doesn’t breach any contracts. For more clarity in regards to the legality of this situation, I suggest speaking with your local labor board.

  39. Sean Barker
    Sean Barker March 23, 2020

    How does this effect paid time off that you have accrued at your original rate?

    • Lindsay Sommers
      Lindsay Sommers March 25, 2020

      Hi! That’s quite an interesting question. First, I don’t believe that a pay cut would affect how you accrue your time off because time off is based on hours, not pay rate. . Also, I would assume that the hours you previously accrued were already earned at your regular rate of pay. If you were to leave the company, you would most likely get paid out at the rate of pay that you accrued those hours. If you need to know if a pay cut affected your time off, you should speak with your HR department or local labor board.

  40. Cj
    Cj March 26, 2020

    Hi , we have had a 45% pay cut and been told that we will work 2 weeks on and 1 off due to the Coronavirus affecting business, but the 2 weeks on will be a 6 day working week , when I would normally only work 5 is this legal.
    Thank you

    • Lindsay Sommers
      Lindsay Sommers March 26, 2020

      An employer is legally allowed to cut an employees pay and amount of hours. If your employer told you about the pay change after they already implemented your new pay or changed pay based on discrimination, that would not be legal.

    • Pete
      Pete April 2, 2020

      Are you hourly or salaried? If hourly, check state overtime laws, since they may be required to pay overtime if 40 hours per week are exceeded. If salaried, this is probably legal (Think of schools that require teachers to come in on Saturday or breaks to make up lost time).

  41. Taylor James
    Taylor James March 27, 2020

    My employer mandated a compensation reduction for all employees claiming it is due to the effects of coronavirus. Our business has been considered essential, and I have data to back up that our business has seen increased sales since the coronavirus outbreak. The circumstances do not warrant compensation reductions, and are not in the spirit of the small business interruption loans.

    If our founder is trying to take advantage of the stimulus package, is there recourse we may be able to take? My pay has been cut below the amount of laid off workers receiving unemployment benefits, and I will be unable to cover the costs of living next month while our founder is purchasing a new personal home and a new property for the business to expand.

    Is there recourse you recommend I take and could this be deemed as taking advantage of a horrible situation?

  42. Concerned Mom
    Concerned Mom March 31, 2020

    I’m a county government employee in NJ, and am salaried.

    Due to the current pandemic, I am working from home. There has been some mention of possible pay cuts.

    I cannot afford a reduction in pay since the provisions for my children & bills (primarily, rent & auto loan) are depended on my salary as-is.

    As a salaried employee, would I be exempt from a pay cut or am I still a “sitting duck”?

    • Lindsay Sommers
      Lindsay Sommers April 2, 2020

      Your employer can unfortunately cut your salary at any time, as long as your new rate still complies with salary basis requirements and doesn’t breach your contract. If the pay cut breaches your contract, that can potentially be a legal problem. If that’s the case, you’ll have to speak with the DOL or legal counsel for assistance.

  43. Yevette
    Yevette March 31, 2020

    The company decided to cut all salaried workers pay by 20%. WE all have a contract in place that we were required to sign. Isn’t this illegal to reduce pay essentially breaching the contract upon hire?

    • Lindsay Sommers
      Lindsay Sommers April 2, 2020

      It could be a potential breach of contract. To know for sure, I recommend speaking with a legal counsel or the DOL.

  44. Travis
    Travis March 31, 2020

    I was hired in January 2020 as full time and paid $12.00 an hour. Within a month I was offered a promotion with new position and a pay raise to $14.25 an hour. Due to the recent Coronavirus situation my performance has gone down due to it. My employer told me if I wanted to leave this position I had to go down to part time and a pay cut to only $9.50 an hour and even go into a different department altogether otherwise I need to quit. Is this legal here in Florida? My job has been impacted by the virus frustrating me so I asked about going back and that was my only option.

    • Lindsay Sommers
      Lindsay Sommers April 2, 2020

      Technically an employer can cut pay and hours legally at any time. Most employees are “at will”, which means that employers can take any action whenever necessary. It looks as though the current minimum wage in Florida is $8.46/hr. If your employer goes any lower than that, then his actions will be considered illegal– you must at least get paid minimum wage when working. In regards to your lack of payment, I suggest speaking with your local unemployment office about partial unemployment benefits. Since the COVID-19 outbreak, a lot of people are getting assistance to make up for their lost wages. You can find your unemployment office info here: https://www.careeronestop.org/LocalHelp/UnemploymentBenefits/unemployment-benefits.aspx?frd=true

  45. Chris Finn
    Chris Finn March 31, 2020

    Dear Lindsay,
    As a result of the COVD-19 virus people in my Massachusetts company have been laid off, furloughed, or, for salaried workers, been informed of a 30% pay cut for the company to survive. If I do not accept the pay-cut, will I be ineligible for unemployment benefits through my state?

    Thank you,
    Chris

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