Can My Employer Force Me To Take a Pay Cut?
Is your employer asking—or demanding—that you accept a pay cut? It is stressful and frustrating to deal with an employer who wants you to accept less favorable terms. You may be wondering: Is it lawful for an employer to make me take a pay cut? In New Jersey, the answer is “yes”—unless you have legal grounds to challenge it. Here, our New Jersey employment lawyer highlights the key points to keep in mind about your rights if your employer is trying to force you to take a pay cut.
Background: New Jersey At-Will Employment State, Terms Can Be Modified
Similar to most jurisdictions in the United States, New Jersey is an at-will employment state (National Conference of State Legislatures (NCSL)). Unless there is a specific contract in place that dictates otherwise, an employer can generally modify the terms of employment—including salary—without the employee’s consent. In other words, both employers and employees have the right to change (or end) the relationship at any time. Of course, an employee does not have to accept a pay cut. They have the right to leave their position if they no longer want to work for the company at a reduced wage/salary.
Why an Employer Trying to Force a Pay Cut May Not Be Lawful
As New Jersey is an at-will employment state, companies and organizations have the presumed right to alter an employee’s pay—including cutting their salary with relatively little notice. That being said, there are some circumstances in which an employer trying to force a pay cut on a worker may not be lawful. Here are four of the most notable examples:
- Breach of Contract: Employment agreements are enforceable contracts. An employer in New Jersey cannot make unilateral changes. If an employee has a contract that specifies the duration, salary, or specific conditions under which employment can be terminated, a unilateral pay cut by the employer could constitute a breach of contract.
- Discrimination: Employers cannot legally reduce an employee’s pay for discriminatory reasons. Under the New Jersey Law Against Discrimination (LAD) and federal law, it is unlawful to adversely alter compensation based on an employee’s age, race, gender, religion, national origin, or other protected characteristic.
- Retaliation: It is unlawful for an employer to reduce an employee’s salary as a form of retaliation for engaging in protected activities, such as filing a complaint or lawsuit regarding workplace discrimination, participating in an investigation, or whistleblowing.
- Wage and Hour Violation: Pay cuts must comply with minimum wage laws. In New Jersey, any reduction that brings an employee’s earnings below the minimum wage would be illegal. Any new salary terms must still comply with all wage and hour regulations.
Contact Our New Jersey Employment Law Attorney Today
At Poulos LoPiccolo PC, our New Jersey employee rights attorneys have the experience that you can trust. If your employer is trying to force you to take a pay cut, we are here to help determine your rights and options. Call us now or send us a direct message online for a confidential consultation. From our office in Monmouth County, we work with employees throughout New Jersey.
