While it does appear extremely unfair and a situation in which the employer is risking losing a valuable employee by doing this, it would not normally be illegal since there was no contract in place and it does not appear to involve discrimination or retaliation based on a protected status.
Because of the very significant reduction in compensation (about 20% depending on the amount of commissions earned), the employee could reject the lower "offer" and quit, and still collect unemployment benefits. Or, the employee could indicate to the employer that it must restore the $17.50 rate, or the employee intends to quit.
However, it does not appear there would be any legal recourse against the employer for their actions.
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