Can an employer reduce your salary if they demote you to a lower management postion?

Could an employer ask you to take a paycut back down to the salary of 6 years ago? And, if you don’t take the cut in pay, could they ask you to work more than the 45 hours that you work on salary?

Asked on August 16, 2012 under Employment Labor Law, Pennsylvania

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

Actually, yes your empoyer can do this. The fact is that unless you have an employment contract, union agreement or specific company policy that probitis such a decrease, it is perfectly legal to reduce an employee's salary. In an "at will" employment relationship, an employer can set the terms and conditions of employment much as it sees fit. For their part, an employee can continue to work for an employer or not, their choice. Additionally, a reduction of wages must not be due to some form of actionable discrimination.

However, if you are a "non-exempt" employee (your state's department of labor's website or the US Department of Labor's website will explain), you cannot be paid less then federal minimum wage. Also, to the extent additional hours put you into ovetime you must be paid accordingly.

Note: A salaried employee is typically considered to an exempt employee (but not always). If you are such an employee then OT and minimum wage laws do not apply. Again, refer to the 2 above-mentioned websites for further explanation.


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