Are employers allowed to cut your pay rate because they feel like it? Welcome to our new YWRC column ‘Tony’s Bants… A column series where YWRC Business Manager Tony Stevens will vent his spleen on a current employment-related issue.
Why do we work?
Well some people have sweet jobs where they get to take photos of baby seals off the coast of Greenland so getting out of bed on Monday morning isn’t a struggle.
For most of us, our number one reason for working is to get paid. How else can we fund our latte-filled and smashed avocado-laden lifestyles?
Let me set the record straight right away.
UNDER NO CIRCUMSTANCES CAN YOUR BOSS CUT YOUR PAY!
Unless of course you give your consent but why the heck would you do that!? The pay rate you start on is the pay rate you stay on unless of course you receive a pay increase. A pay decrease simply cannot happen without your say so.
We received a complaint from a 15-year-old worker whose employer had notified them that they would be dropping their pay rate from $15.75 per hour to $13.80.
Their rationale for the cut was that they had been “overpaying” the worker. They didn’t realise the youth rate was actually $13.80 and believed that therefore, they were within their rights to reduce the worker’s pay to the starting out rate – since they were a “youth”.
What I’m guessing happened here is that the employer started paying the worker $15.75 because that was the (adult) minimum wage before the increase to $16.50 earlier this month. I’m also assuming the employer had no idea the starting out rate existed or else they would have established this as the worker’s pay rate from the beginning.
So poor Johnny (we’re going to call him Johnny because…why not) is staring down the barrel of $1.95 per hour pay cut all because of his employer’s ignorance.
Look here buddy! Just because you suddenly realised the bare minimum for paying young people is even less than you thought doesn’t mean you can take a machete to Johnny’s pay packet!
Right at the beginning of an employment relationship you establish your pay rate. This is in your contract and once signed it can’t be changed unless by mutual agreement.
Now, if you never received a contract that’s even worse and your employer can be liable for a $10,000 fine, and they STILL can’t drop your pay rate.
An actual overpayment is when an employer has paid you above your contractually agreed pay rate. Typically in this situation they are going to want that money back and they can recover it as long as they consult with you around the proposed process for doing so. They can’t simply start deducting it from your future pay cheques without discussing it and getting some agreement from you first.
If something like this is happening to you – get in touch.