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Legally, this isn't controlled by statute. If that is what the employer is willing to pay for an employee to step down, then legally it is fine. Nothing in law mandates that an employer pay someone more simply because they have been with the company longer.
In fact, the employer could refuse to let an employee step down unless they were willing to accept minimum wage. Again, wages for particular work simply is not controlled by external employment laws, so this just isn't a matter that would be dictated to an employer.
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