Orange County Employment Lawyers Blog
The expectation when we accept a job is that our pay will increase incrementally the more experience and value we provide to the company. But as our Orange County wage and hour lawyers can explain, pay reductions can occur – and they aren’t necessarily illegal. 
Whether you are an hourly or salaried employee in California, you are entitled to receive the agreed-upon, legal rate of pay for the work you’ve already done. Bosses have the discretion to reduce hourly pay and salary rates just as they can raise them. What they should not do, however, is reduce pay without giving advance notice to the employee. Employees should have the option to decline to continue working at such a rate. Just as an employee can’t force an employer to pay them a higher rate without consent, an employer can’t force an employee to work for a rate to which they didn’t agree. Once the work is complete, the employer must pay the last agreed-upon rate.
Further, that agreed upon rate can’t in any case be lower than the California minimum wage. As of Jan. 1, 2022, the minimum wage for companies with 25 or fewer employees is $14/hr, and $15/hr for companies with 26 or more employees.
When Would a Company Reduce Worker Pay?
Ideally, worker pay would only go up. However, the reality of business sometimes is that employers must reduce expenses in order to stay in business. Or sometimes, employees aren’t meeting expectations, and it’s costing the company money.
The two main reasons companies reduce pay:
- The business is having revenue issues and is faced with the decision to either cut employee pay or shut down. Many employees will prefer to be paid at lower rates than lose their jobs, but it’s important that employers provide notice of the change so employees can make an informed choice for themselves.
- A significant job change, namely demotions, warrants reduced pay. When a worker is demoted, the previous rate of hourly pay or salary may be above the reasonable rate for the new position.
All this said, a company cannot refuse to pay you the agreed-upon rate for hours you’ve already worked. Continue Reading ›