Is it legal to cut my rate of pay without a just cause?

UPDATED: Dec 13, 2011

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Is it legal to cut my rate of pay without a just cause?

My employer is threatening to cut my rate of pay. I was put in a tough situation as an employee, basically expected to run a store I had no business running, because I was/am a novice. I asked to be taken out of the situation, and put back at the original low-volume location. The owner said yes, admitted he was wrong and that I could go back. He never spoke of a pay cut, but now 4 weeks later he has told employees and coworkers he was cutting my pay? Today my supervisor called me to tell me of my new rate? Should I have to take a cut because of a bad decision from the owner? Is this legal?

Asked on December 13, 2011 under Employment Labor Law, Indiana


M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

Yes, this is legal. While you are entitled to your pay rate for work already performed, you are not entitled to if for current or future work if your employer chooses to reduce it (as long as minimum wage laws are being complied with). So unless you have an employment contract or union agreement that prohibits such action, or this pay cut would in some way violate company policy, or the decrease would be the result of some form of actionable discrimination, it is perfectly permissible under the law. 

The fact is that most employment relationships are "at will". Basically, this means is that an employer can hire or fire an employee for any reason or no reason at all, as well has increase/decrease salary/hours, promote/demote, and generally impose requirements as it sees fit (with or with out notice). In turn, an employee can choose to continue to work for an employer or not. 

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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