Can an Employee's Hours and Pay Be Reduced When Business is Bad?
Full Question:
Is it legal to reduce the salary of a bookkeeper of a small corporation by 10% or 20% if the hours per week is reduced by the same percentage. Gross receipts are down by about 50% and the President and Vice-President have been unable to take any pay for the last year. The company has been losing money for more than a year.
04/29/2011 |
Category: Employment ยป Hours |
State: California |
#24750
Answer:
The answer will depend on whether there is an employment or union contract covering wages. If not, then an employer may change the terms of employment at will, as long as done for business and not discriminatory reasons, and compensation levels needs to comply with minimum wage laws. We suggest you read any applicable employment contract, collective bargaining agreement, employer manual or handbook to determine the employee’s rights in regard to hours and pay, as well as your obligations regarding the same. In some cases, the courts will construe an employee handbook as a contract.
