In many cases, it is legal for your boss to cut your pay rate. Maybe you have been making $30 an hour, but they want to reduce it to $25 an hour because the business is having cash flow issues. This can be frustrating as an employee, but in most cases it is legal for an employer to make this decision.
That being said, there are some situations in which the pay cut could be illegal. Here are a few examples.
It applies to hours you have already worked
The pay cut can only apply to future hours. Your boss cannot reduce your pay for hours that you have already worked at a higher rate.
There is a discriminatory reason for the pay cut
If the reason for the pay cut is discriminatory, it is illegal. For instance, an employer could not decide to unilaterally reduce the pay for all female employees while keeping the pay for male employees the same, as this would be gender discrimination.
It violates a contract or wage and hour laws
If you have a contract, then it may stipulate how much you need to be paid or how reductions can be carried out. If the reduction violates that contract, it is illegal.
The same is true if the reduction violates federal or state minimum wage laws. You need to be paid at least minimum wage, and your employer cannot legally reduce your hourly rate below that level.
What options do you have?
Have you faced a pay cut that you believe may be illegal? If so, it can help to work with an experienced attorney to explore your options.
