As a general rule, if you have at-will employees working for your company, you do have the ability to reduce or increase their wages as you wish. Likewise, these employees have the option to continue working at the job or to quit and seek other employment. The amount that you pay your workers is up to you, as long as it is within the minimum wage requirements in the state of California.
However, there are some situations in which reducing an employee’s wages could result in a lawsuit and accusations that you have acted in an illegal manner. It’s important to know how this may happen so that you can avoid it, so let’s take a look at three examples.
The pay reduction is for previous hours
First of all, any reduction in pay can only be for hours that haven’t yet been worked. For every single second the employee was on the clock already, they deserve to be paid the old rate. It is very important not to try to reduce wages for hours that have already been worked and that are on the books. Doing so could be a form of wage theft.
The employee has a contract
Additionally, some employees may have contracts stipulating exactly what they are supposed to be paid. This has to be paid properly for the duration of the contract, unless a new deal is negotiated. But you cannot pay the employee less than you agreed to pay them when you signed the contract.
It’s a form of retaliation
Finally, you cannot reduce an employee’s wages to retaliate against them if it would be a violation of their rights. For example, if an employee filed a workers’ comp claim, you cannot retaliate by cutting their pay. The same is true if they filed a complaint for harassment or discrimination.
If you do find yourself facing disputes with employees or former employees, be sure you know exactly what legal steps you can take.