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Question:
Our restaurant has been hit hard by the economy. I'm thinking about reducing employee's pay rates or the number of hours they work as a way of cutting costs without cutting jobs out completely. Is that legal?
Answer:
As a business owner you can certainly make the decision to reduce an employee's rate of pay or reduce the number of hours they work. If you decide to reduce an employee's rate of pay, you must inform him or her prior to the reduction and absolutely cannot reduce their wages retroactively, or bring the rate below minimum wage. Keep in mind that if an employee's wage is reduced significantly or hours are cut down significantly, it could mean that the employee could be eligible for partial unemployment compensation benefits. |
