According to the U.S. Department of Labor’s Wage and Hour Division “an employer may not reduce an employee’s wages below the minimum wage.” The federal minimum wage is $7.25 per hour so an employer cannot reduce an employee’s pay below this amount.
There are exceptions to this rule however. For example if an employee is working in a “tipped occupation” (such as a waiter or bartender) the employer is allowed to pay a lower hourly wage as long as the tips the employee earns bring the total pay up to at least the minimum wage.
Some states have their own minimum wage laws that are higher than the federal minimum wage. In these states the higher state minimum wage applies.
If you think your employer has illegally reduced your pay you can file a complaint with the Wage and Hour Division.
Can an employer reduce an employee’s pay rate?
It depends.
If the employee is exempt then the employer cannot reduce the salary.
If the employee is nonexempt the employer can reduce the hourly pay rate but not below minimum wage.
How much notice must an employer give an employee before reducing their pay?
Generally an employer must provide employees with at least a 24-hour notice before reducing their pay.
Can an employer reduce an employee’s pay rate if the employee is performing poorly?
It depends.
If the employee is exempt then the employer cannot reduce the salary.
If the employee is nonexempt the employer can reduce the hourly pay rate but not below minimum wage.
Additionally the employer would need to have a documented history of the employee’s poor performance.
Can an employer reduce an employee’s pay rate if the company is experiencing financial difficulties?
It depends.
If the employee is exempt then the employer cannot reduce the salary.
If the employee is nonexempt the employer can reduce the hourly pay rate but not below minimum wage.
Can an employer reduce an employee’s pay rate if the employee is working fewer hours?
It depends.
If the employee is nonexempt the employer can reduce the hourly pay rate but not below minimum wage.
If the employee is exempt the employer may need to reduce the salary proportionately.
Can an employer reduce an employee’s pay rate if the employee is taking a leave of absence?
No an employer cannot reduce an employee’s pay rate because the employee is taking a leave of absence.
Can an employer reduce an employee’s pay rate if the employee is going on vacation?
No an employer cannot reduce an employee’s pay rate because the employee is taking vacation time.
Can an employer reduce an employee’s pay rate if the employee requests a flexible work schedule?
No an employer cannot reduce an employee’s pay rate because the employee requested a flexible work schedule.
Can an employer reduce an employee’s pay rate if the employee is out sick?
No an employer cannot reduce an employee’s pay rate because the employee is out sick.
Can an employer reduce an employee’s pay rate if the employee is on jury duty?
No an employer cannot reduce an employee’s pay rate because the employee is on jury duty.
Can an employer reduce an employee’s pay rate if the employee is takingFMLA leave?
No an employer cannot reduce an employee’s pay rate because the employee is taking FMLA leave.
Can an employer reduce an employee’s pay rate if the employee quits?
No an employer cannot reduce an employee’s pay rate because the employee quit.
Can an employer reduce an employee’s pay rate if the employee is fired?
No an employer cannot reduce an employee’s pay rate because the employee was fired.
Can an employer reduce an employee’s pay rate if the employee retires?
No an employer cannot reduce an employee’s pay rate because the employee retired.
Can an employer reduce an employee’s pay rate if the employee moves to a different position within the company?
It depends.
If the employee is exempt then the employer cannot reduce the salary.
If the employee is nonexempt the employer can reduce the hourly pay rate but not below minimum wage.
