My husband's employer gave a memo at a staff meeting to all workers telling them that because of the economy, everyone is getting 7% reduction in wages effective Monday, October 13, 2008. However two employyes were told they were getting $2.00 and $4.00 wage cuts because they worked too slow. This performance issue was never addressed with the two employees prior to the memo/staff meeting. Is this illegal? What should the two employees do? :confused:

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Originally Posted by jsbb2008

My husband's employer gave a memo at a staff meeting to all workers telling them that because of the economy, everyone is getting 7% reduction in wages effective Monday, October 13, 2008. However two employyes were told they were getting $2.00 and $4.00 wage cuts because they worked too slow. This performance issue was never adressed with the two employees prior to the memo/staff meeting. Is this illegal? What should the two employees do? :confused:

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I assume there's no union, no employment contract?

It's employment at will in this Country - assuming you are in the US - and the employer can reduce wages (or just outright fire someone) - the employee has the choice of working or not working at the reduced wage and I believe WOULD be able to collect Unemployment Insurance in most States as quitting for cause. Of course, it wouldn't be automatic and there would most probably need to be a hearing.

It's the same when benefits are reduced - unless, for example, only people with blue eyes get the reduction and it's a form of discrimination there is little that can be done.

As far as the notification - seems callous and almost cruel but I don't see that it's illegal.

Be happy they have jobs to even have a pay cut. A lot of places around here just closed their doors with NO advance warnings or announcements. Companies are trying to stay open right now doing whatever they have to do. Some companies here are only working a 4 day work week to stay open.

Perfectly legal, unless they have a contract, or part of a union with a contract then a company can lower anyone's pay, take away any medical benefit, any other benefit any time they want. They could move them all to min wage if they wanted to,

So they are free to leave and go to work somewhere else,

Unless it is a very large corporation laying off a very large amount of workers and the "Warn" notice is applicable than it is legal as long as:

The notice is given to the employees before any work is performed under the new wages.

Shirley