Pay cuts are not always illegal. To some degree, a person’s employer does have the right to change their pay, which could include either giving them a raise or reducing their hourly rate.
That said, some pay cuts do violate employees’ rights. Let’s take a look at three examples of when it could be illegal.
1. The employee is not notified in advance
First and foremost, an employee must always be notified in advance that their pay is going to be reduced in the future. If they are never told and do not agree to it, and their employer then just reduces their pay for hours that they already worked, it could be a violation of their rights.
2. It is a form of retaliation
Another potential issue is when someone’s pay is cut as retaliation. Maybe they are a whistleblower who reported illegal activity by the company. If the company then responds by cutting their pay or even terminating their position, that is illegal retaliation.
A similar issue is when a pay cut is discriminatory. If people from a certain religion or ethnic background have their pay cut for that reason, it could be a violation of their rights.
3. It dips below the minimum wage
Finally, pay cuts still have to maintain a pay rate that is over the minimum wage. For those in the private sector, the state minimum wage of $16.90 in California is higher than the federal minimum wage, so the state wage applies. If an employer cuts someone’s pay rate so low that it goes under minimum wage, it is illegal.
Do you believe that you have suffered an illegal pay cut as an employee? Be sure you know what legal options you have at this time.