In many cases, it is fully legal for an employer to cut an employee’s pay. But there are also cases in which this could be a violation of the employee’s rights. It’s important to understand where this line is and when it could be crossed.
Essentially, pay cuts have to apply going forward, affecting future hours that a person will work. They cannot apply retroactively to hours that the person has already worked.
Failing to give two weeks’ notice
For example, say that an employee decides to quit and does not give two weeks’ notice. They just ask for their paycheck to be mailed to them. Legally speaking, two weeks’ notice is not required unless there’s an employment contract, so the employee can do this.
However, the employer may be frustrated, wishing this person had decided to give two weeks’ notice just to help the business. They may say that they are going to reduce that person’s pay to minimum wage for their last paycheck.
But this would be an illegal reduction because the employee has already logged those hours. They deserve to be paid for their time at the rate they agreed to when they were working. The employer could only reduce the rate to minimum wage for future hours that the employee has not worked yet—which is impossible since the employee is leaving the business and will not be logging any more hours.
Wage and hour violations can be complex and often lead to disputes. It’s important for those involved to carefully look into all of their legal options.