Q:

Can an employer reduce your wages?

A:

In some cases, wages can be reduced, provided that the reduction is still above the federal minimum wage. Different rules apply regarding wage reductions for hourly versus salaried employees.

According to the U.S. Department of Labor, the Fair Labor Standards Act requires that an employer pay its employees at least the federal minimum wage. For hourly employees, the Act does not prevent an employer from reducing either the hourly rate or the number of hours of its employees, as long as the reduced rate is still above minimum wage. For salaried, exempt employees, a reduction in salary below the predetermined agreement amount causes the employee to no longer be listed as an exempt employee, and the employer is then required to pay at least the minimum wage plus overtime in that instance. An exception to this rule is due to an economic downturn of the business. In a downturn, it is permissible to reduce the predetermined salary of the employee without the loss of exemption. As of November 2009, the FLSA requires that salaried employees be paid at least $455 per week.

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