Is it legal for an employer to change your yearly salary for less than what you earned without changing the hours that you work.

Yes it is legal because you being salary they can make you work as much as they want. Many companies are doing everything they can for cut backs in employees and their wages.

Sure -as long as you are not covered by a union agreement. For example, my employer has just annpounced a 5% across-the-board cut for all salaried employees. They are free to pay you what they want, and you are free to quit if you don't agree.