As someone who has been working with your employer for some time, you’ve consistently received raises and positive ratings that have resulted in a great hourly wage. You were happy with what you were getting, but then your employer called you into the office to let you know that your wage was being cut by a few dollars per hour.
That’s a huge change, and it’s one that will have a lasting impact on your finances. Is it legal?
Pay changes: When they’re legal (or not)
Your employer can cut your pay at any time as long as they pay you for the work you’ve already done at the previously agreed rate. They must inform you that you’ll be getting a lower wage and you need to agree. If you disagree, you can leave the position without accepting the lower pay rate.
Employers are able to reduce your pay if you are demoted or are given a different role. However, they cannot lower your pay if:
- The cut is discriminatory.
- You have a contract agreement that says a pay cut is not allowed.
- The pay cut would drop your pay to below the minimum wage.
- You didn’t get notification prior to the pay cut.
If the pay cut is in response to you reporting harassment or discrimination at work, or if the cut is directly related to your gender or other protected categories, then it is potentially against the law and could be a discriminatory pay cut. It’s your right to understand if you’re being taken advantage of. If your employer has violated the law, then you may be able to pursue a claim.