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Can Employer Cut Wages Without Warning?

By: Maggie Lonsdale BA (hons) - Updated: 22 May 2019 | comments*Discuss
 
Employer Employee Reduction Pay Law

Q.

I work for a limited company as a digger driver. This week I was 7 hours short on my payslip. Some of my work mates also were short.

There was no explanation so I phoned my boss who told me he could not afford to pay all the wages. Is he allowed to do this without bothering to inform us?

(G.M, 19 February 2009)

A.

The short answer to this is ‘no’. The legally accurate answer to this is also ‘no', but the slightly longer and perhaps more realistic answer is ‘no, but...’.

Legal Pay Reductions

Looking at the facts first, there are only a few instances in which it is acceptable for an employer to make reductions in employees pay. The first instance is for legal deductions such as tax and national insurance, which are usually taken at source and detailed on your payslip.

The second legally acceptable situation is when deductions are made for union membership, pension contributions or other agreed payments relating to your employment. These need to be agreed in advance, detailed on your payslip and written into your Employment Contract.

There are also circumstances that can be considered acceptable but are less common, such as if the worker has been genuinely overpaid and the employer is getting back the money, although this can only be done to a maximum of 10% of salary per payslip. If a worker has taken part in Industrial Action, deductions can be made and if there is a court order connected to the employer, such as an attachment of earnings for non-payment of council tax.

The final situation where deductions are acceptable relate to shop workers and missing stock, although again this can only be deducted at a maximum of 10% payslip and must be agreed in writing.

It is the prior agreement in writing that characterises all the legal wage deductions and it is this that is missing in your situation, as well as, more importantly, a fair reason for the deduction in the first place.

What to Do

Unless you now feel like your situation relates to one of the above situations, you would certainly have a case to report your employer – perhaps you could start by speaking to your local Citizens Advice Bureau.

However, the country is still gripped by a global economic downturn and more and more people are losing their jobs. If you feel like your boss gave you a fair explanation and you can swallow the pay reduction, you may be better placed to ride out the difficulty. Perhaps you and your colleagues could call a meeting with your boss to ask about the current situation of the company, and say that you can be fair if you are kept informed.

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I was given a pay rise just above minimum wage this April, now my employer wants to reduce my pay rise. Is this legal?
Jackie - 22-May-19 @ 1:54 PM
Left my job after 8 months just got my final wage slip without my holiday pay he said because I didn't take them before January I've lost them he never said I had a time limit to take my holidays and also there was never anyone to cover my night shift .He owes me 7 1/2 days pay were do i stand
Leung46 - 4-Apr-19 @ 1:24 PM
Can my employer cut 2 hours off my wage because the living wage rate has increased. He said that everyone has had hours cut but when asking other workers they have not had hours cut. I am a vulnerable adult and struggling to live on what small wage I do get.
Cleaner - 30-Mar-19 @ 7:15 AM
We have had a new boss take over the pun I work at and I have heard through the grape fine that plan on cutting our hourly rate because "we get paid too much" can this actually happen or is it true they cannot reduce pay without our consent?
Dex - 20-Mar-19 @ 3:11 PM
I've been working for a Cafe for 4 years. In the past 2 years the owner proposed me to pay me some money through the bank with wage slip and the rest cashin hand(£50 per week). As a stupid I agree. About 2 month ago I asked her to pay all my wages through the bank because I'm scared of circumstances if find out about it and she agreed. But instead of £13/h she paid me£11/h.its this legal? I know was cash in hand and can't prove that my wage was£13/h.can I do anything about it? Regards
Mel - 29-Jan-19 @ 6:59 PM
The company my husband works for sent him a letter to say he has a wage rise per hour of 26p that will begin (last November) it never arrived in his wages . They are now saying the letter was sent in error but it’s addressed to him and states a rise but they are not going to pay him the monies owed .
Nicky - 18-Jan-19 @ 8:39 PM
Can an agency legally change your pay scale without any corospondance with you?
nonsuch - 30-Nov-18 @ 6:58 PM
Can an employer cut your wage after the age of 55 ?
Geordie - 10-Oct-18 @ 4:07 PM
I work from home as a sales and marketing manager. My boss agreed with me a basic of £2,000pm plus £1,000pm guaranteed as an advance on commission as i had left a job after 11yrs that had paid me the same amount so it was agreed that was the amount i needed to fulfill my financial obligations. The fist months salary i am £1,000 short and he turns around and says that i had not fulfilled on deliverables. He then presents a KPI based on percentages to aquire the 'bonus' i was never told about this as i would never have taken the job as the kpi is set up in a way that you won't achieve. since then every month has been £1,000 short.
tolwo - 27-Sep-18 @ 6:31 PM
Got my wage and it said shortage £30 but are they allowed to take money from your wage without been notified
Stmary - 20-Jul-18 @ 10:28 AM
My employer has reduced our basic rate to 0,70£ less without warning us. We never received any letter regarding the reduction, instead we received a letter informing us of a 2.5% pay rise. That’s when we noticed that our basic rate was reduced instead of going up. It was £7,86 in 2016, £8,88 in 2017 and this year £8,11. Are they allowed to reduce our payments without any warning or written notice? Also, can they inform us of a pay rise when what they did was to reduce the wages, misdirecting us to believe otherwise? Thanks a lot!
BB - 14-Jul-18 @ 1:28 AM
nmcc - Your Question:
The small company I work for has now decided to pay for holiday pay (due to staff now are applicable through their hours for this), but I have found out that a member of my team who has worked for the company for over 2 years at a rate of £8.20 p/hr has now been told she is now being paid at £7.83 and the 27p is holiday pay entitlement (therefore reducing her hourly pay to £8 p/hr). As she has been working with them for over 2 years, I didn't think this was legal to do. What do I do? Who can I ask for advice as I have instructed them to seek further advice

Our Response:
If you’re a worker and you’ve tried solving a problem or concern informally by talking to your manager but you’re not satisfied, you can make a formal grievance complaint in writing. Please see link here.
WorkingRights - 18-Jun-18 @ 3:11 PM
The small company I work for has now decided to pay for holiday pay (due to staff now are applicable through their hours for this), but I have found out that a member of my team who has worked for the company for over 2 years at a rate of £8.20 p/hr has now been told she is now being paid at £7.83 and the 27p is holiday pay entitlement (therefore reducing her hourly pay to £8 p/hr).As she has been working with them for over 2 years, I didn't think this was legal to do.What do i do? Who can I ask for advice as I have instructed them to seek further advice
nmcc - 15-Jun-18 @ 4:15 PM
I worked 7 months for 19733 per anum,in April 2018 my employer reduce my salary at 17063 per anum.What I have to do?
Iulian - 22-Apr-18 @ 9:57 AM
I've was in my supervisor post for the past 9 years earning £10.40 an hour, due to being unhappy in my post which resulted in me having time off work for depression as it was affecting my home life, I took the step and decided to resign from my post. I was asked to continue for another month which I did, however when I approached my manager about new wages I was told that they would now only be paying me £8.04 can they drastically cut my wages?
Doc - 11-Apr-18 @ 8:00 PM
Gazza84 - Your Question:
My employer 12 months ago gave me notice that they were reducing my hourly rate from £10 per hour to £9 and gave me the option of accepting or leave. They said that they had conducted a pay review in the company and others were affected but they gave me no details as to who and I was the only factory based employee to be affected. At the time I hadn't got 2 years service so had to accept as I need the job but I felt at the time this wasn't right and still feel that way now. Is this legal what they have done or do I have grounds to challenge this. Advice needed please.

Our Response:
As you signed and accepted the changes at the time, there may be little you can do now retrospectively. However, you might wish to give Acas a call regarding this, especially if you think you were singled out being the only factory-based employer to have had your wages reduced at the time. There may be a case to claim back pay if Acas think you have a case.
WorkingRights - 10-Apr-18 @ 11:07 AM
My employer 12 months ago gave me notice that they were reducing my hourly rate from £10 per hour to £9 and gave me the option of accepting or leave. They said that they had conducted a pay review in the company and others were affected but they gave me no details as to who and I was the only factory based employee to be affected. At the time I hadn't got 2 years service so had to accept as I need the job but I felt at the time this wasn't right and still feel that way now. Is this legal what they have done or do I have grounds to challenge this. Advice needed please.
Gazza84 - 9-Apr-18 @ 4:31 PM
I started my job at beginning of December 2017. When I received my pay at the end of the month I was short of a weeks money, when I asked why they said that they always keep a weeks money in hand! They said I was told verbally, whichI was not. I am not happy at all about his and is this legal for them to withhold a whols weeks money from me when I am paid monthly. Never ever had this before and I am 48 years old. Advice needed please. THank you.
Gully - 8-Apr-18 @ 6:11 PM
My employer 12 months ago gave me notice that they were reducing my hourly rate from £10 per hour to £9 and gave me the option of accepting or leave. They said that they had conducted a pay review in the company and others were affected but they gave me no details as to who and I was the only factory based employee to be affected. At the time I hadn't got 2 years service so had to accept as I need the job but I felt at the time this wasn't right and still feel that way now. Is this legal what they have done or do I have grounds to challenge this.
Gazza84 - 6-Apr-18 @ 11:10 PM
Hi I’ve been paid £8.40 for a whole year, I’ve now been told it was an error and now they are reducing my pay? Are they allowed to do this? Thanks x
Loz - 28-Mar-18 @ 3:48 PM
I have been employed for 7 years at my job with last 6 years with current employer after being T.U.P.E over from previous employer and my wages have been matched by my current employer for last 6 years , can my employer now reduce my hourly rate to harmonise with rest of other employees ?
Bardyman - 27-Mar-18 @ 9:11 PM
Hi I work at a pub I am 50 years old this year I get 7.50 for the first 16 hours then only £5 per hour after is this legal
Loopy - 20-Mar-18 @ 8:06 AM
Four years ago I was given a substantive pay increase for being available out of office hours team. At the time I received a letter saying it was a substantive pay increase not an allowance. I'm now leaving the organisation next month, but before xmas my manager notified HR that I wouldn'tbe part of the out of hours team. Since then HR have reduced my salary by the same percentage as the increase four years ago.They have also done this giving me no notice of making any changes, I found out when I received my last pay slip.Can they make changes without telling me?
Gary - 19-Feb-18 @ 4:45 PM
Blonde- Your Question:
My boss put my hourly rate up by 10p to 7.60 after me asking for a pay rise as I do more than my job description. This was in November. December payslip said 7:60 but this months ( January) is saying 7:50 again. Is he aloud to do this without speaking to me?

Our Response:
Perhaps there has been an oversight. You would have to speak to your boss directly regarding this matter.
WorkingRights - 18-Jan-18 @ 3:24 PM
My boss put my hourly rate up by 10p to 7.60 after me asking for a pay rise as I do more than my job description. This was in November. December payslip said 7:60 but this months ( January) is saying 7:50 again.Is he aloud to do this without speaking to me?
Blonde - 17-Jan-18 @ 9:20 PM
I work for an agency, when I started my work, they told me the payment rate but after two months they changed it without notifying me, I found myself working less money after seeing payslep, their explanation was that's how the company told us to pay you at a low rate . I do not think it's right how they did! Would it help me if I make a complaint?
Bogdan - 11-Jan-18 @ 6:54 PM
I have worked for a company for over 13 years & in all that time we have had a "bonus" paid to us at Christmas.Some years ago there was a bust up between the MD & the FD & some of it was about the Christmas bonuses, chocolates for staff & bottles of drink for managers.I am sure it was established at the time that this was regarded as "Customary & Traditional" as it had always been done & there was no set criteria for gaining the "bonus" so it was regarded as a Christmas box rather than a bonus in the terms of the word.Last year we had a Christmas box paid to us, but it was a lot less than the previous year & meant that we actually earned less in that financial year than the previous one.This year we have been told that we will not be getting anything, so this now means that we will have earned less this year that we did back as far as 2014.Surly this isn't right?Is there anything that can be done about this?
Lyns - 12-Dec-17 @ 2:39 PM
Hi, I've just found out that in the last couple of months my employer has reduced my hourly rate (by around 80p) without telling me. I never signed anything. Was never given notice of this. Is this legal? Many thanks.
cgrlysdy - 29-Nov-17 @ 6:55 AM
Few years ago my boss without any warning or negotiation took us off hourly pay and put us on mileage.tip.load. So if your sat for any time waiting to load or unload your being paid nothing. Likewise if stuck in traffic crawling you are on literally pence per hour. There is also a clause you must wash your vehicle or you don't get paid. For this we are not paid. Few weeks ago I was asked to work Sunday and the motorway was closed. I worked 4 hours which after tax worked out at £1.26 per hour. Any advice appreciated. Worked for company 12 years.
Martyn - 29-Oct-17 @ 5:45 PM
I am a residential support working for challenging young people i have always recieved £75 per sleeping night. I finely got my sept wage slip yesterday and my over night pay has gone down to £40 and no one told me is this legal
Lisaj71 - 26-Oct-17 @ 2:02 PM
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