Changes or reduction in wages and wage benefits

An employer can change its wage agreement with an employee at any time, regardless of what the original wage agreement was, without the employee's permission. There are certain requirements that an employer must meet to make changes in its wage agreements or wage benefits:

1. An employer should notify its employees in writing before any wage reduction will take effect. The notice period may be as little as 24 hours, as long as the employee receives notice of the new rate before working any hours at that rate. Most employers are able to give notice one pay period in advance, and some choose to give as much as 30 days notice (check state laws for notification requirements).
2. An employer cannot make changes in pay or wage benefits that result in the retroactive reduction of wages or wage benefits that are already earned. In other words, the reduction in wages cannot take away pay or wage benefits that have already been earned up to the time of the notification. Any reduction in pay or wage benefits must be prospective from the time of notification. An employer may, however, retroactively increase an employee's pay or wage benefits without notification.
3. An employer cannot reduce an employee's pay below the minimum wage. However, the employer can reduce an employee's rate of pay all the way down to the minimum wage with proper written notification. An employer also can take away all future earnings of wage benefits from the time of the written notification.