As an employer can I reduce an employee's wages to minimum wage if they fail to give a 2 week notice?

Question

I work at a company that is an "at will" employer. We have them sign a policy upon employment that states failure to give a 2 week notice will result in their hourly wage being reduced to federal minimum wage. The owner of the business put this policy into place and had documentation stating this is legal in "at will" employment situations. The problem is that the owner is out of the country, I can't find her documentation and I have a former employee that is challenging the policy and says that it's illegal. Does anyone have any link to government or any other website supporting this policy?

Answer 1

In general, the provisions of employment contracts are not permitted to reduce the rights an employee would normally have under local legislation.

Reducing someone's wage is considered constructive dismissal.  In other words, it can be seen as a firing.  However, since you're in an 'at will' state, that is probably legal.

One the third hand, you don't say how long this person has been working.  Does your state provide for severance for long term employees who are dismissed?  If so, lowering the wage will trigger that.

Incidentally, you certainly cannot reduce wages after the hours are worked.  A reduction in wage is only effective once the employee has been notified in writing.

Answer 2

I don't know the answer to your question.  However I do know that is a bad idea to tick off an employee who is leaving and then keep them working there for even a single hour.  Depending on their job, they can do your company a lot of damage if they know they are leaving, still have access to business files, computers, property, the lunch room, customer records, etc and are really ticked at the company.  If I were you, I'd cut them a check for minimum wage through what was to be their last day, tell them to contact the owner when she gets back regarding any more wages owed, and have the now ex-employee escorted to pick up their personnal property and then off the premises immediately.

Answer 3

I work in an "At Will" state & yes, it is ILLEGAL to reduce someone's pay for not giving any notice in an At Will state.

This so-called documentation (I am sure) is something drawn up by the owner & has no merit what so ever in a court of law.

To have that document be legal would men that the state would no longer be At Will since it is REQUIRING a 2 week notice.

Also, you cannot lower someone's wages for work already performed.

Answer 4

It's not likely legal to change a pay rate after the employee has already worked hours at an expected rate.

And, it's also likely that employees cannot sign their rights away.

You should simply call the department of labor in your state and ask someone in the wage and hour division if the policy is legal.