Can your pay be reduced if you are demoted?

Answer

According to the United States Department of Labor, an employer may reduce the pay of any nonsalaried employee as long as the pay does not fall below minimum wage. An employer is also allowed to reduce the number of hours an employee is scheduled to work.

Even with an exempt employee, as long as the pay cut is a permanent one and not retroactive, an employer may cut someone’s salary provided the reasons for doing so are not illegal, such as reducing pay because a person has children or because of a pregnancy. An employer can give a raise at any time and can reduce pay as well.

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If you work in an at-will position, your employer can terminate you, demote you or decrease your salary at any time and for any reason, according to the National ...
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