After work on a Friday, your boss calls you into their office. You think that you might be fired. But it turns out that your boss is just telling you that they’re going to have to cut your pay moving forward, so you’re going to earn less than you were previously.
Although you may feel relief at keeping your job, you may also feel that it’s unfair for your pay to be reduced. You expected to earn more, and you may have only taken the job because of that higher pay rate. Is it legal for your boss to cut your pay?
When does the reduction apply?
There are two important questions to ask, the first addressing the timing of the pay cut. It can’t apply retroactively, and it can’t affect any hours that you’ve already worked. If your boss is informing you at the end of work on a Friday, they can reduce your pay starting on the following Monday, but they can’t cut your pay for the week that you just put in the books.
Why is it being done?
It’s also important to consider why your pay is being reduced. If the company is just struggling financially, your boss may be well within their rights to cut your pay. But they can’t do it for a discriminatory reason, such as reducing your pay because of your gender, your race or a new religion that you joined. They also can’t cut your pay as retaliation—such as if you filed a sexual harassment complaint against a supervisor.
In other words, pay cuts are technically legal, but there are various factors that can make them a violation of your rights. If you believe this has happened, it’s important for you to know exactly what legal steps to take moving forward.