Can an employer decrease an employee's wage? I gave an employee a pay increase and new "position" at the

Question

beginning of the year. Since then, we have not met production goals and I want to eliminate this "new" position and go back to the way things were. Can I do this and decrease the wage back to what it was?

Answer 1

Assuming you are in the United States, generally you can decrease an employee's pay for whatever reason you want, BUT there are some things to worry about:

- As already noted, a contract may limit your options here. You probably do not have a formal employment agreement with the employee. You may, however, have made agreements that are enforceable as a contract, particularly if you're doing all this hiring, pay-adjusting, etc. without a lawyer.

- There's the possibility of a discrimination claim (similar to a wrongful termination claim), if the employee is a member of a group that's protected, e.g. a minority, over 40, etc.

- As you probably appreciate -- quite aside from the legal issues -- this can raise a significant morale / personal relationship issue ... which, at the end of the day, is what lies beneath a lot of what later become legal issues.

Answer 2

I  believe  you  can  unless  there  was   a  contract  signed  for  the  new  position .

Call   the  employee  to  a  meeting ,  and  advise  him  of  the  cash  flow  problem

( production  goals  not  met ) .

Explain  you  need  to  eliminate  the  position  and  ask  if  he  would like  to   have  his  old  position  back .

If   he   is  a  valuable  employee ,  make  it  clear  you  prefer   not  to  loose  him .

good  luck  and  sorry  about  the  econ  issues

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