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Pay Cut Laws

What is a pay cut?

A pay cut is a wade reduction or a decrease in pay. Many companies often inflict pay cuts on their employees’ wages instead of a lay off or termination. In most cases, generally pay cut questions might be over whelming to employees that do not know the answers. People can ask the Experts any type of wage reduction law or pay cut law questions. Listed below are the top five pay cut questions.

If an employee has over 15 years tenure in management, but the employer has hired new management as well as given the employee a pay cut by moving their position under a younger manager, would this be considered age discrimination.

More than likely this would not be an age discrimination case. Just because the employer has given the employee a pay cut as well as what is typically called a demotion by moving the employee’s position, would not be unlawful. The only way this case could be considered age related is if the employee could prove derogatory statements from the employer regarding the employees age or specifically said that the pay cut or demotion was related to age. Many times age discrimination is hard to prove.

If an employee in the state of California, took a pay cut before being laid off would their vacation pay be paid at the pay cut rate or at the wages prior to the pay cut?

In the state of California, vacation pay for terminating employees is paid at the final rate of pay in effect as of the date of the separation. Therefore, the vacation will be paid at the employees reduced salary.

What is the legal pay cut or wage reduction limit in the state of Texas?

The employer has no limit as to how much pay cut they are restricted to. If wages are cut 1/3 or more, the employee can claim a material change in employment, constructive termination, and then apply for benefits.

Does the Comm. of PA have a law that trumps the federal law, and would allow salary reductions to exempt employees? Can an employer be selective as to who suffers the reduction?

First it is important to know that State law can never "trump" Federal law when Federal law covers a particular issue. In other words, a State law that would be less favorable to employees or conflict with Federal law would be void. That is a basic premise of the Supremacy Clause. Therefore, there is no option to reduce the salary of an exempt employee based on the employer's decision to cut hours to save money.

In NC can an employer give an employee a pay cut and still require the employee to continue the same job part of the time if they have 'eliminated the position'?

In most situations, the employer can give an employee advance notice that they will be reducing salary, even if it is for the same job even if they have eliminated the position. Unless there is a written contract to the contrary, most employees are at will and as long as the employer gives advance notice can reduce an at will employee's salary. The employee however, can choose not to accept, but if the reduction in salary is not more than about 33%, the employee would not likely qualify for unemployment benefits.

Before you agree to a reduced salary, a pay cut, or a wage reduction, get answers to the essential questions you may have. Contact Experts for fast answers that you may need in a hurry.
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