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Reducing Pay

TanyaETanyaE 10 Posts
in Compensation Vote Up0Vote Down
Can anyone out there tell me where I can read up on any laws that pertain to reducing and employees pay. Can we do it? Is it legal? Need answer asap.

HR
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  • 2 Comments sorted by Votes Date Added
  • Theresa Gegen TXTheresa Gegen TX 814 Posts
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    Unless the employee has a contract, the general rule is that an employer can reduce pay in the future. In otherwords a pay reduction cannot be retroactive -- and the employee must be paid the agreed rate for the work he has completed.

    If the employee is at will and does not have a contractual rate, his future pay can be reduced (for work not yet completed). The best method to do so would be to notify the employee in writing, then implement the reduction in rate. The theory is that if the employee continues working after notification, he has agreed to the new rate. If he says he will not agree, then his remedy is to quit.

    Of course, miniumum wage and overtime laws must be complied with, and the pay reduction cannot be discriminatory (based on an unlawful reason).

    Good Luck

    Theresa Gegen
    Texas Employment Law Letter
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  • marcmarc 3,126 Posts
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    Our state requires a 7 day notice in writing of any pay reductions.
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