Technically speaking, an employer usually has the right to cut an employee’s pay. There are some rules about how this can be done. For instance, the pay cut cannot apply to hours that the employee already worked, and it cannot be in violation of a standing employment agreement.
One other issue to consider, though, is whether the pay cut is a form of retaliation. If it is, that could make it illegal because it is designed to intimidate the employee or to retaliate against them for taking a protected action. Even if the pay cut only applies to future hours worked, and there is not an employment contract in place, it could still be a violation of that person’s rights.
Are you a whistleblower?
One example of this is if an employee decides to become a whistleblower. Perhaps they believe that illegal activity is happening at the business or that the employer is engaging in fraud. Maybe they have noticed intentional safety violations. The employee has decided to become a whistleblower in order to take a stand against these types of violations.
If that employee then receives a pay cut, it could be a form of retaliation from the employer, designed to punish that employee. This may not be as drastic or as obvious as firing the employee outright or cutting their hours, but it is serving essentially the same purpose. Retaliation is illegal, as is using the threat of retaliation to intimidate workers and prevent them from becoming whistleblowers to begin with.
Rights and legal options
Whistleblowers do have certain rights and legal protections. Those who believe that they may be facing retaliation need to know about all of their legal options and the steps they can take.