Employer dropped my hourly pay rate without notice.

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Employer dropped my hourly pay rate without notice.

I’m a register nurse, working in a hospital system. I am PRN- meaning I work as needed without benefits or PTO but my pay is higher with greater flexibility in my schedule. I received an offer letter for this job in Dec. 2016, accepted and started in Jan. 2017. The offer letter is still attached to my online account via the hospital website. I recently heard there was a hospital wide pay increase. I normally don’t check my pay except to make sure my hrs are accurate. I signed on April 2018 and looked at my pay history to see if I was getting an increase and noticed my employer lowered my hourly rate by 2 back in Sept. 2017. This was done with no notice – no email, snail mail, or in person. I spoke to the HR director at my hospital and she stated they did an audit and found that my offer rate was the max PRN rate at another hospital in the system and my current 2 less rate was the max PRN at the hospital I worked at. That I should have never been offered the higher rate. She couldn’t say why I was never informed. Is this legal with an offer letter? Is the offer letter not a contract? What are my options?

Asked on May 13, 2018 under Employment Labor Law, Virginia

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

1) An offer letter is not binding--that is, it does not prevent a subsequent reduction in your pay--unless it was an actual contract for a defined period of time (for example, a one-year contract, a three-year contract, etc.), in which case, it "locks in" your pay for the duration of the contract (until expiration). A document which is not a contract for a defined period of time does not, however, set compensation for any particular length of time and may be changed at will--all the typical offer letter does is state what you earned when you took the job, but does not prevent reductions at any point after that. Remember: except to the degree changed by an actual written contract for a defined time, all employment in this country is "employment at will."
2) You have no right to not "accept" the lower rate: with a contract as described above, your employer may unilaterally change or set your rate/pay at will.
3)  However, even when the employer can (as above) change your pay, the change is ONLY effective upon notice: i.e. from the moment of notice forward. Changes without notice are ineffective: you must be paid at the then-in-effect rate (the rate you were performing work for) until notified of a change. They have to pay you the difference between what should have earned (old rate) given the lack of notice and what they did pay, up until when you were first made aware they were or had tried to lower your rate (i.e. when you had notice of the change). If they do not, you could sue them for the money, such as in small claims court.


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