Question: Is there a law that prohibits me from reducing my employees’ wages? If not, how much notice of a change in pay rate do I have to provide to those affected by the rate reduction?
Answer: There is no specific employment law restricting you from reducing your employee’s wages, but there are parameters regarding how it is to be done.
No reduction of pay can happen retroactively — ever. The employee has a right to receive compensation based on the agreement in place until notified of a change and that change goes into effect. Employers who are “at-will” must notify the employee of the change and the prospective date upon which it is in effect. Ideally this is done in writing for documentation purposes. The employee accepts the new terms and conditions by continuing to work. If not, the employee quits.
Rate reductions cannot result in paying employees less than minimum wage and may not adversely affect employees who fall in a protected class.
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The opinions expressed above are based on the writer’s comprehensive background as a human resources professional and the policies in our Bent Ericksen & Associates products having been reviewed by legal counsel. The writer is not an attorney, and the advice provided in this message should not be construed as a legal opinion. If you have legal questions after considering the advice and reading any materials referenced, it is recommended that you consult with your attorney.
Author bio
Tim Twigg is the president of Bent Ericksen & Associates, and Rebecca Crane is a human resource compliance consultant with Bent Ericksen & Associates. For 30 years, the company has been a leading authority in human resource and personnel issues, helping dentists deal successfully with the ever-changing and complex labor laws. To receive a complimentary copy of the company’s quarterly newsletter or to learn more about its services, call (800) 679-2760 or visit www.bentericksen.com.
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