It's also legal for your employer to cut your pay, either instead of or in addition to a cut in hours, unless the pay cut means that your hourly pay is below the minimum wage. Its natural the staff would refuse the pay cut, if the communication was as blunt as you describe. Please negotiate personally or through the union/association that the Pay cut/if any is reasonable and leaves enough to pull on with life necessities. If you state you refuse and the employer therefore terminates you, or you are demoted and quit due to the pay, etc. There are some exceptions to the minimum wage rules, but you cannot be paid less than the minimum wage rate for your classification in your state. A No. Can an Employer Force You to Work Overtime? An employer can give you a cut in pay as long as they notified you prior, the pay cut isn’t discriminatory, your pay isn’t under minimum wage, and if the paycut doesn’t breach any contracts. LOCATION: GWENT. Before You Make Employee Layoffs, Consider Cost-Cutting Strategies. If you decide to take the pay cut, you may be … Case Review: Dismissed for refusing a pay cut. Many organisations will now be raising the idea of pay cuts - … Instead of redundancies being the first port of call, many employers have sought to reduce the salaries and benefits of current employees. Second, can I refuse the pay cut and still be considered "laid off" (Note: Even after my pay cut I would still be above the minimum wage and also above the amount that I would be given in unemployment insurance on a weekly basis)? If you aren't protected by an employment contract or bargaining agreement, your employer can reduce your salary and your work schedule at any time, with some limitations.. If you refuse to take a pay cut then your employer either has the choice of backing down or, as threatened, making you redundant. State and federal laws change frequently, and the information in this article may not reflect your own state’s laws or the most recent changes to the law. For more clarity in regards to the legality of this situation, I suggest speaking with your local labor board. Workers with individual employment contracts or protections under union contracts are typically shielded from salary or wage reductions during the periods covered by those contracts. Your employer might have … U.S. Department of Labor. The federal minimum is $7.25 per hour. In many cases, the answer is yes. I am a bot, and this action was performed automatically. Please negotiate personally or through the union/association that the Pay cut/if any is reasonable and leaves enough to pull on with life necessities. Reducing an employee’s pay is no minor thing. "Fact Sheet #70: Frequently Asked Questions Regarding Furloughs And Other Reductions in Pay and Hours Worked Issues." Better option, so you don't have a dismissal for a reference, is to accept the pay cut and look for a new job. pay cut cannot be enacted without the employee being notified. The Employment Tribunal in this case focused on the reasonableness of the employee’s refusal to accept a pay reduction. However, in a recent case heard by the FWC, it was found that a Wellpark Holdings employee was unfairly dismissed for refusing to accept a 10% pay cut. Your employer doesn’t need a reason to cut your pay or reduce the hours you are scheduled to work. (“Non-exempt” and “exempt” refer to whether the employee is covered by the overtime protections afforded by the Fair Labor Standards Act (FLSA)., An exempt employee would be one that met the criteria for not being entitled to overtime pay. The letter will likely explain that there will be a pay cut, with details of how much salary will be reduced and when the reduction will go into effect. Even if your employer is not threatening dismissal, there are other potential consequences of refusing to accept a reduction in salary. So what will likely happen is that they sack you and just pay you the contractual or statutory (if it isn't included in your employment contract) notice. During this period, we will continue to monitor the company's financial situation. (The federal minimum wage is currently $7.25 an hour, but many states have higher minimums.) Nothing says you must accept the pay cut and keep working for this company. By using The Balance Careers, you accept our. Some states have a higher minimum wage than the federal minimum. If the economic situation and the company's performance improves in the next two quarters of the year, your former salary may be restored. Pay cuts are legal as long as they are not done discriminatorily (i.e., based on the employee’s race, gender, religion, and/or age). Should an Employer Increase Employee Hours with No Extra Pay? You can refuse a pay cut - it's called quitting your job. The Balance Careers uses cookies to provide you with a great user experience. No one can force you to take a pay cut, so you could reject such an offer even if your fellow workers accept. Hello, thank you for posting to r/Jobs!. In this case, the employer sought to impose changes to terms and conditions, including a pay reduction of five per cent. If you're an employee who isn't protected by a bargaining agreement or employment contract, there is no set amount that you have to be paid. Know the Impact of the Minimum Wage Increase? So, if they propose a pay cut, and you refuse, they will have to give you 12 weeks notice to quit (or give you 12 weeks pay in lui, and let you go straight away). If you pay is being cut drastically - say you're making $30 an hour and they want to cut you to $8 - you could probably still get unemployment, but probably not with a cut from 10 to 8. Usually, an employer needs the consent of each individual employee before a pay cut is imposed. We are asking to reduce your monthly salary from $4,000 to $3,680 beginning one month from now. Can you collect unemployment benefits if you refuse a pay cut? An individual employee may well struggle to argue that a dismissal was unfair for not accepting a reduction in wages and/or benefits, where their employer has sought to implement a reduction in wages and benefits across the whole of the workforce, and the majority of that workforce has accepted the change. Companies cannot target workers for wage reductions by race, age, or any other protected class under discrimination statutes. Your employer can change any aspect of your contract, as long as they give you 12 weeks notice. When there is no prior notification about the pay cut. Kathy WilliamsVice President, Broadway Inc.123 Maple StreetHudsonville, NY, USA 10711. What Is Minimum Wage for Workers Who Receive Tips? Accessed April 22, 2020. For this reason, you might consider requesting, in writing, that your employer not contest your unemployment application if and when you leave. Staff at London Heathrow Airport face being sacked if they refuse to accept a 15 per cent pay cut during the coronavirus pandemic. Your current position and duties will remain the same. For instance, if you complain that your boss is sexually harassing you, and then your pay is cut, that is called retaliation and it is illegal. Is it legal for an employer to cut your pay or your hours? Please contact the moderators of this subreddit if you have any questions or concerns. This means earning at least a certain amount of money—currently, $684 per week—and meeting certain “duties tests.” Salaried workers are classified as exempt.). For instance, if you complain that your boss is sexually harassing you, and then your pay is cut, that is called retaliation and it is illegal. As you are aware, the recent economic downturn has adversely affected Broadway Inc. To increase cash flow and limit layoffs, the company has decided that salary reductions are necessary at this time. We have recently been instructed to assist a client who was, unfortunately, quite suddenly dismissed after he refused to accept a pay cut. Mr Booth appealed the decision to dismiss him, which was not upheld. Employers should approach this subject with caution and seek legal advice from the outset to ensure that they have consulted with the workforce properly before they implement any changes. At least that way, the employees still remain in work. The Employment Appeals Tribunal, however, held that the Tribunal should, in fact, have focused on the reasonableness of the employer’s decision to implement the changes. Can an employee refuse a request to reduce their pay? A pay cut is a change to your employment contract and you have the right to disagree with it. We appreciate all the hard work you have put into your position at this company, and we do not want to lose you as an invaluable employee. The executive staff has already taken the same pay cut. He continued to refuse to accept the new contract, despite the offer of reviewing his salary after six months. When employers reduce wages, they are required to do it in an equitable manner. However, employers cannot reduce wages to a level which is lower than the minimum wage in their state.. Instead of redundancies being the first port of call, many employers have sought to reduce the salaries and benefits of current employees. Your understanding, support, and co-operation to help Broadway Inc. endure the current economic situation is greatly appreciated. If the employer makes the pay cut without the employee’s agreement or by formally terminating and replacing their contract, the employee may either make it clear that they are working under protest, or resign on the grounds that the employer has breached their contract of employment by imposing a unilateral change. Alison Doyle is the job search expert for The Balance Careers, and one of the industry's most highly-regarded job search and career experts. An employee is entitled to refuse a request that is made of them to reduce the amount of money that they are paid. In the current economic downturn, employers are keen to find ways to save money and try to stay afloat. Thousands of … So, if they propose a pay cut, and you refuse, they will have to … For example, an employee's hours or salary cannot be cut for taking time off for jury duty, to serve in the National Guard, or for whistle-blowing regarding an employer's actions that are harmful to the public. 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