No one likes to hear that their hourly rate is being reduced. Maybe you took a job that paid $30 an hour, but your employer has recently informed you that they’re going to switch the position to one that pays $25 an hour. They’re not going to fire you, and you’re still going to keep your job. You’re going to have the same amount of hours that you need to work every week, with the same responsibilities. You are simply going to make less money when you’re on the clock.
As an employee, this obviously feels unfair. You may even wonder if what your employer is doing is illegal. Can they actually cut your pay after you accept the job?
Pay changes must address future hours
The reality is that employers are allowed to change pay rates. If you’re an at-will employee, meaning you don’t have an employment contract, your employer can probably raise or lower your pay rate whenever they want. It is not illegal for them to do so.
The key thing to keep in mind is that these changes have to apply to future hours or hours that you have not yet worked. Your employer cannot retroactively change what you’re going to be paid for hours you have already put in.
This is important because it means that you still have the option to quit your job. You do not have to work for the lower pay rate. Once you’re informed that it’s coming, you can decide if you would like to make less money in the future or if you’re going to quit and find another job that pays more.
That being said, there are certain cases where employers make mistakes, such as trying to reduce pay for hours that were already worked. If you find yourself in a legal dispute, be sure you know what options you have.