You know that the company where you work has been struggling financially. Your boss has been trying to find solutions and is also trying to avoid laying off workers.
What they eventually come up with is reducing your pay. You certainly don’t want to receive a pay cut and do not think this is ideal, but your boss claims they have no choice. What you’re wondering is if this is a legal decision or a violation of your rights as an employee.
Important factors to consider
The legality of the pay cut depends on a few things. First and foremost, for all hours that you’ve already worked, your boss has to pay you the amount that you agreed to at that time. For instance, there could be a two-week delay between when you log your hours and when you receive your paycheck. If your boss retroactively reduces your hourly rate and pays you less than you believed you were earning, that is illegal.
Additionally, you may need to consider exactly why the pay cut is happening. Is everyone receiving a pay cut due to the financial difficulties? Or are you being targeted due to your inclusion in a protected class, such as your race, gender, religion or disability status?
Finally, if you do believe you’re being targeted specifically, is it a form of retaliation? For instance, if you reported sexual harassment or illegal activity at work and then your boss decided that your pay needed to be cut, that retaliation could be illegal.
Navigating a dispute
These types of issues often lead to disputes when employers and employees do not agree on how pay should be addressed. When you find yourself in this position, take the time to carefully look into all of your legal options.