I don't see a problem with that--assuming the employee is at will. But, have you given the employee an opportunity improve performance? Seems harsh if the pay cut is done without some effort to get the employee on track.
Also, make sure that you have documented the performance issues so that you're not facing a discrimination claim. And, you should give the employee some notice of the paycut--do you have a policy on this? Any past practice?
[quote user="pwilliamson"]In the state of VA, are we able to reduce an employees wage based on non-performance?[/quote]
Chicago1 summed it well and I wasn't going to reply until I started thinking.... Do you mean, literally, "non-performance" or do you mean "poor performance"?
In doing a little research I ended up comparing two sites (in my opinion the best two).
SHRM (nice looking site, not as good info)andiWorkwell (not as nice looking, more and better info)
If I were you, I would definitely check out both. Among other things I know iWorkwell has policies from every state well organized and easy to use.
in my opinion I would check out www.iWorkwell.com I feel the service they provide is pretty much the best out there. They are pretty much the google of HR.