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How much notice does and employer have to give before a pay cut?

Palo Alto, CA |

I realize that I am an "at will" employee and my employer can change the condition of my employment; however, before an employer cuts pay, how much notice should be given? I work in California and my employer is attempting to sell his business. To make the company look more profitable, all employees had their wages cut. Our pay period is bi-monthly and notice of the pay cut, for the prior two weeks worked, was given the day before we received pay for that period; consequently, we were working for nearly two weeks at a reduced pay without notice. Should we have received notice when before we were actually working for less money?

Attorney Answers 4


This is a black and white violation, no ambiguity or variations at all. Pay cuts can be prospective only.

All of the employees should together address this issue with the employer and mention that an active labor complaint will not enhance the sales value of the business. If necessary, employees can get together and get an attorney or make a complaint to the State Labor Commissioner.

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At will gives the employer great power to change terms and conditions, but not this far. You can have your pay cut immediately moving forward on notice from the employer, but the employer can never cut pay for hours already worked. Doing so is a violation of law.

You can make a claim with the Division of Labor Standards Enforcement, or you can file a claim in small claims or superior court. You might also consider simply having an attorney write a letter to the employer on your behalf or to collectively do so to protect any one person from unlawful retaliation.

Good luck to you.

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A retroactive paycut is really nothing more than a disguised forfeiture of earned wages. That is to say, it's entirely illegal. Your options are to make an informal demand of payment to your employer, file a wage claim with the DLSE, or file a lawsuit in civil court. Good luck to you.

This answer is a general interpretation of the law and is not fact specific to your case. Likewise it does not create an attorney-client relationship. You should seek an attorney for a review of your specific facts and documents.

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There is no exception to the rule, your employer cannot cut your wages, have you work for what is perceived to be a higher rate and then inform you after the fact that he has cut your wages. This is a slam dunk win before the Labor Board, you can also receive penalties and attorney fees.

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