Can an employer in AZ retroactively cut my salary?

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Can an employer in AZ retroactively cut my salary?

We were told there was going to be a 20% pay cut across the board and that it was retroactive to the beginning of the pay period in which we already worked 30 hours. Is this legal in AZ? I know some states don’t allow this type of retroactive reduction, I understand going forward it is at their discretion for the most part, but I was just concerned about the 30 hours worked before they communicated the reduction.

Asked on June 23, 2009 under Employment Labor Law, Arizona

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

No, it's not legal anywhere. Once you have worked the hours, you have earned the money and companies may not--without your agreement--go back and change the amount they paid, any more than you could go in a store, buy a couch for $1,000, then after it's delivered and you get the credit card bill, say you're only going to pay $800 for it.

The reason I say "without your agreement" is that (1) if the company is in danger of not being able to continue without a retroactive pay cut, you may choose to agree to it; and (2) the company would be within its rights  to terminate you if you don't agree to the cut (e.g., if they don't get enough retro savings, they have to eliminate jobs)--though they'd have to pay you in full for work to date. So unfair as it is, you may choose to accept the cut.

However, it is for you to accept--once you worked it, the money is yours.


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