Does an employer need a reason to decrease a worker’s hourly rate of pay?

We are currently W-2 employees and paid on a per file basis of $30 a file. If and when we are paid hourly we receive $30 per hour. Now our employer is making us go hourly at $25 per hour. Does he need a reason to reduce our hourly rate by $5 per hour? We have not received any negative performance reviews in the 11 years we have worked for this employer.

Asked on July 18, 2015 under Employment Labor Law, Georgia

Answers:

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

Answered 5 years ago | Contributor

First of all, does this action violate the terms of any union agreement, employment contract or company policy? Or is this treatment the result of actionable discrimination? If not then it is legal.

The fact is that most work relationships are "at will". Consequently, an employer can set the terms of the workplace much as it sees fit. This means that it can decrease pay rates for any reason or no reason at all.

Note: A decrease in pay is legal unless�the employee is exempt and the decrease will bring their hourly rate below the state minimum wage.


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