When might a future pay cut be illegal?

As a hard-working employee, you’d probably be horrified to hear that your employer is about to drop your wages. You might be surprised to learn that employers are allowed to do this. They are allowed to tell you that moving forward, they can only offer you a lower rate than you have been getting up till now.

What they are not allowed to do is make those cuts retrospectively. They must pay any hours that you have already worked, at the agreed rate.

So, if cutting your future hourly rate is allowed, does that mean it is always allowed? Or are there circumstances in which that, too, might be illegal? Here are some examples when they could be illegal.

Your employer intends to put you below the minimum wage 

An employer might offer you an amount that is above the federal minimum wage – which sits at a miserly $7.25- and claim they are allowed to do this. California law, however, requires them to pay no less than $16.50 per hour. The state law takes preference here.

Your employer is retaliating against you

Both federal and California law give you certain protections as an employee. They give you the right to report breaches of those protections by your employer. For example, if someone has been sexually harassing you at work, you have the right to report them. The same if your employer has been discriminating against you. You also have the right to call your employer out to higher authorities for things such as cutting corners with safety or trying to cheat the government out of money in a contract.

If your employer does not appreciate you making these reports, they may use a wage cut to punish you and, in the process, send a message to other employees to stay quiet. This is illegal retaliation, even if the wage cut will only apply moving forward.

Seeking legal guidance to understand your options could be helpful if you find yourself in such a position.