Does a promotion have to be an increase in the employees wages?

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Does a promotion have to be an increase in the employees wages?

I just got a promotion but my employer cut my pay by $400 a month. Even though this is a promotion I will be making a significant pay decrease and I don’t see how an employer can cut pay when they offer a promotion.

Asked on April 12, 2012 under Employment Labor Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Unfortunately, you can't confuse what is fair or logical on the one hand with what is legal on the other. Logically, you are right--a promotion should come with a raise, not a pay cut. Legally, however, unless you have an employment agreement or contract of some kind, including one specifically relating to your promotion, which sets or guarantees your compensation, your employer has the legal right to determine and change your compensation at will, for any reason. Therefore, your employer could legally cut  your pay at the same time that it "promotes" you.


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