It can be upsetting to get a pay cut at your job. If your pay was recently cut, you might wonder whether you have any legal recourse. In some cases, it is legal for a company to cut an employee’s pay. In others, it is illegal. The employment lawyers at Swartz Swidler might be able to help you if your employer illegally reduced your pay.
A pay cut cannot be retroactive
When your employer reduces your salary, the reduction does not apply to the work that you have already completed. You must be paid what you agreed to work for. Your boss is allowed to reduce your salary, but he or she cannot reduce it without telling you about the pay cut in advance. If you don’t agree to the pay cut, you can choose to quit your job.
Notification of a pay cut
Employers must inform their employees about pay cuts before they work any hours at the new rate. Employers are not allowed to cut your pay because they are angry that you resigned or they are short.
When companies can lower pay
Companies sometimes are forced to reduce pay in order to remain open. If your employer is having problems with cash flow, the business might either be left with the choice of shutting down or cutting pay. It is critical that everyone gets the same percentage of salary reduction. Employers can also cut pay when there is a substantial change in job duties. For example, if you are demoted, your pay might also be cut.
When pay cuts are illegal
There are some situations in which pay cuts are illegal, including the following:
- When there wasn’t a prior notification
- When the cut is applied retroactively
- When your pay is cut because you engaged in a protected activity
- When the pay cut is discriminatory
- When the pay cut forces you to earn less than the minimum wage
- When the pay cut violates an employment contract
What to do if your pay was cut illegally
If you believe that your employer reduced your pay illegally, you are able to file a complaint with your state’s department of labor. If you are still employed, you might want to try to work the issue out within the company before you file a complaint. Check with payroll to find out if it was a mistake. If the payroll department says that your pay is correct, talk to your boss. You can tell your boss that it is unlawful for your pay to be lowered without receiving a prior notice. If that doesn’t work, go over your boss’s head. If that still doesn’t work, contact the employment lawyers at Swartz Swidler for help. Call our office for a free consultation.
