Hello and pay reduction

Let’s Talk Business Member Introductions Hello and pay reduction

  • Post
    J. Klien
    Participant
    Hi, I’m new. I have a question. I’d like to reduce the pay for one of my employees. I don’t think he’ll like it but I’m trying to save money. Can I just do that whenever I want?
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  • Replies
    Sam G.
    Participant
    There’s a few rules actually that you should follow. You can’t reduce their pay if you have a contract with them that says you owe them more. You also can’t make the pay cut retroactive. You can’t start paying them less for work until they are aware of the rate change. Those are basically the two most important things to avoid. Obviously, and this goes without saying, you can’t reduce pay for any discriminatory reason, although that doesn’t seem to be your motivation. Other than that, I don’t think there’s any obligation to not lower an employee’s pay if you feel their rate is too high. They won’t like it, so you should be prepared to introduce cancer into your morale around the office. If you can explain the reasoning well, that’s a plus. It’s best to have employees that DON’T hate you.
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    J. Klien
    Participant
    I think I may just end up cutting hours instead of cutting wages at least that way it doesn’t seem like I am trying to undercut the employees. I don’t want to bring down morale but sometimes we have to do what we have to do.
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