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Can your employer reduce your hourly rate?

When your boss comes to you and tells you that they have some unfortunate news, your first thought is that they’re letting you go. You know that the company has been struggling.

But your boss tells you that they just need to cut costs. In order to do it, while you will get to keep the job you have, they want to reduce your hourly rate.

You’re wondering if they’re even allowed to change your pay rate. It’s the main reason that you took your job in the first place. Does your employer have this right?

Changing the rate for future employment

Yes, unless you have a contract and so you are not an at-will employee, your employer can change your pay rate for the future. They just can’t change it for any hours that you already worked. 

So your employer would have the right to tell you that you have to work the next day at a lower rate, but they couldn’t tell you that your pay for hours that you had already logged was going to be reduced retroactively. They still owe you for those hours at the rate that you agreed to before working them.

What if a dispute arises?

As you can see, changes to pay are sometimes permitted, but it is important that they are carried out correctly, following the established legal regulations. If you believe that your employer has violated your rights – perhaps by cutting pay for hours you already worked – it could lead to a dispute, and you need to know what legal options you have.



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