You took this job because it offered a decent rate of pay. You might even have given up an old job you liked more, or moved across town just to get this opportunity. Now your employer is telling you that they cannot afford to pay you at the same rate anymore.
Is this illegal? Or is it something your employer is allowed to do to you?
Going forward only
An employer is allowed to change a person’s rate of pay. But they can only do so from that point onwards. They are not permitted to do so, looking back. The reason for this is that you have the opportunity to say no to future work if you do not wish to accept the lower pay rate, but you cannot do that for the time you have already worked. You worked it in the belief you were going to get the rate your employer had told you they’d pay, so they must honor that agreement for the work you have already done.
What could make a forward pay cut illegal?
There are occasions when a forward applying pay cut is illegal. Firstly, the hourly rate cannot take you below the minimum wage, which is currently $16.50 an hour here in California.
The other thing that might make a forward pay cut illegal is the reason behind it. If an employer is doing it out of retaliation after you participated in a protected activity, such as reporting safety breaches or sexual harassment, then it’s illegal. The other reason it might be illegal is if it is discriminatory, such as if the only people seeing their wages dropped are the non-white workers or if it’s happening because you are pregnant.
If you believe your pay cut may be illegal, you may want to examine your legal options.