Reducing Wages

Angie

I was recently asked if it is legal for an employer to reduce an employee's wage. I obtained some more specifics. Apparently this employee's classification had a wage freeze during last year's collective bargaining negotiations and it is rumored that this year management will attempt to reduce the wages for this classification during negotiations. (The classification consists of 3 or 4 employees).

I am not aware of any regulations that prohibit an employer from setting wages as they see fit, which would include overpayment, underpayment or reduced payment as long as the FLSA minimum wage, overtime/exempt provisions are not violated.

I see some potential discrimination issues, why is just this one classification's wages being reduced?

However, the question remains, is there any law that prohibits an employer from specifically reducing wages?

Theresa Gegen TX

I don't know of any federal law that would prohibit an employer from reducing wages. However, the employer would need to give the employee notice before the wages were reduced (an employer just couldn't give the employee notice the day before paychecks come out, it would have to be before the employee worked at the reduced rate). However, I would be very concerned about employee morale if wages are reduced without any change in job duties. (If the job is restructured and duties are taken away, it might make sense to reduce the pay).

A better way to handle the issue might be to freeze the pay, if the employer thinks the wages are too high. Sooner or later the economy will catch up.

Also, you probably need to check your state law, because there may be some local rules covering wages.

Good Luck!