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Can My Employer Reduce My Hourly Pay Rate?


If you’re an hourly employee, you know just how important each dollar of your hourly rate is. You also understand the impact it can have on your life if your boss decides to reduce your hours or the amount of money you earn each hour.

If this has happened to you, you are probably wondering whether or not it’s legal. After all, shouldn’t the base pay you agreed to accept be the minimum you’re paid? Aren’t you entitled to work the number of hours specified in your employment agreement? Unfortunately, the answer to both of these questions is “no,” but that doesn’t necessarily mean your rights aren’t being violated in other ways.

At-Will Employment Allows Pay Reductions

Many workers in California are employed at will. At-will employment means that employers can change the terms of an employment agreement – up to and including termination – without notice or cause (if you signed an employment agreement, it’s likely you agreed to an at-will employment clause).

At-will employment empowers employers to reduce their employees’ hourly pay or scheduled hours, typically when the company is trying to avoid layoffs or save money. It can also happen when an employer is eliminating certain roles or no longer needs a particular position to be full-time. Keep in mind that although these are understandable causes for reducing pay or work hours, at-will employment doesn’t require an employer to have such a reason.

If you are working under a contract or a collective bargaining agreement, you are not an at-will employee and your employer can’t cut your pay or work hours.

Employers Can’t Cut Pay Rates Below Minimum Wage

Any reduction in an employee’s pay can’t fall below the state or local minimum wage, whichever is greater.

In 2021, the minimum wage in California is $14 for most employers. Businesses can only reduce their employees’ hourly rates to this amount. When the statewide minimum wage raises again to $15 in 2022, employers who reduced wages to $14 must increase pay again to meet the new state minimum wage (or whatever amount is locally mandated by a city or county).

Pay & Hour Cuts Can’t Be Discriminatory or Retaliatory

Under no circumstances can a decision to cut any employee’s pay or hours be based on a protected characteristic such as age, race, sex, national origin, religion, gender, gender identity, sexual orientation, disability status, etc.

It’s also illegal for your employer to use pay and hour cuts to punish employees for engaging in other protected workplace activities, such as reporting discrimination, sexual harassment, discussing unionization, or other actions protected by law.

You can ascertain whether or not you may have been discriminated against by asking your coworkers whether or not their pay or hours were reduced. Remember that discussing compensation with your coworkers is protected by law, and your employer can’t retaliate against you or them without risking liability.

We Can Help If Your Pay Was Unlawfully Cut

If you notice any signs that you or other employees were singled out for pay reductions because of a protected characteristic or as illegal retaliation, consult with an employment law attorney who can help.

We at K2 Employment Law can provide the legal support that employees like you need when your rights at work are violated. Learn more about our legal services during a free consultation.

Contact us online or call (800) 590-7674 today to get in touch with our team!