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Can Employer Cut Wages Without Warning?

By: Maggie Lonsdale BA (hons) - Updated: 18 Apr 2018 | 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've been working with this company since May of 2018 as assistant manager on contracted £8ph in December I was asked to become holding manager of a store on £9ph. All there store managers are salaried and I've been promised the title of store manager my only worry is I earn more on the hourly wage then the salary so if I was to refuse the salary could they lower me back to £8ph seeing as they have been paying me £9ph for past 5 months
Milkiebar - 18-Apr-18 @ 8:05 AM
Doc - Your Question:
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?

Our Response:
If you are contracted for £10.40 per hour, unless you agree to the change in contract you should be paid at £10.04 per hour. If your employer attempts to pay you less without your consent, then you may be able to claim it back. In the first instance, you should attempt to resolve this directly with your employer. If your employer refuses, you can raise a grievance, please see link here . Please also see change of contract information here . If your employer still refuses to comply, then you may wish to give Acas a call in order to explore your options.
WorkingRights - 12-Apr-18 @ 12:47 PM
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
Gully - Your Question:
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, which I 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.

Our Response:
You would have to read the terms and conditions of your employment contract to find this out. If there is nothing written in your contract or in writing, then you may have to bring this up with your employer again and ask for confirmation in writing. However, if keeping a week back is company procedure across the board, then your company can do this.
WorkingRights - 9-Apr-18 @ 11:55 AM
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
My company has made people redundant to save money. They are now telling us they have drawn up new contracts that will reduce our departments wages by 10% and take away 5 days of our holiday entitlement.it has been hinted we could also face redundancy if we dont accept the cuts. The rest of the company is unaffected.Is this legal ? What can we do ?
Rich - 29-Mar-18 @ 11:25 PM
Bardyman- Your Question:
I have a contract for 37.5hrs per week but my employer only provides 35.5hrs per week and then deducts the difference from my wages each month usually between 10-15hrs ! Is this legal to deduct as I thought a contract was to protect both party’s ?

Our Response:
If you are contracted to 37.5 hours per week, then you should be paid 37.5 hours per week regardless of whether you do the work or not. Unless you give permission for wages to be deducted from your salary, then your employer should not be doing this, please see link here. If your employer is doing this without authorisation and against the terms of your contract, then you will be entitled to have this money reimbursed. You may wish to give Acas a call.
WorkingRights - 29-Mar-18 @ 3:03 PM
Loz - Your Question:
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

Our Response:
You would have to look at the terms and conditions of your contract, which will tell you what you correct hourly pay should be. If in your contract, your annual salary hourly rate works out less than £8.40 then your employer can attempt to bring the pay back in line with the terms of your contract. If your annual salary works out at £8.40 per hour, then your employer can only change the terms of your contract with agreement from you.
WorkingRights - 29-Mar-18 @ 9:42 AM
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
I have a contract for 37.5hrs per week but my employer only provides 35.5hrs per week and then deducts the difference from my wages each month usually between 10-15hrs ! Is this legal to deduct as I thought a contract was to protect both party’s ?
Bardyman - 27-Mar-18 @ 9:03 PM
Loopy - Your Question:
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

Our Response:
You should be paid the legal minimum wage which is currently £7.83 per hour. If your employer pays tax for you via HMRC, then you should be able to claim this money back, as paying under the national minimum wage is illegal. You may wish to read the terms and conditions of your employment contract and give Acas a call.
WorkingRights - 20-Mar-18 @ 3:10 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
Blossom - Your Question:
I'm salaried at 17,000pa, after tax act my basic 14167.67, for the last 3 months my basic has gone down £109 per month, I have had no warning of this deduction. I have asked it to be checked and as yet I've had nothing back from management. I'm livid. Are they aloud to do this without warning? or changing my contract?

Our Response:
If you are salaried, then your employer cannot reduce your wages without agreement regarding over change to your contract. You may wish to find out whether there may be another reason or the reduction in wages. If your employer has reduced your wages without authorisation and good reason, you should be able to claim the money back. Please also see gov.uk link here , which will explain more.
WorkingRights - 2-Mar-18 @ 11:12 AM
I'm salaried at 17,000pa, after tax act my basic 14167.67, for the last 3 months my basic has gone down £109 per month, I have had no warning of this deduction. I have asked it to be checked and as yet I've had nothing back from management. I'm livid. Are they aloud to do this without warning? or changing my contract?
Blossom - 1-Mar-18 @ 2:43 PM
Gary - Your Question:
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't be 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?

Our Response:
Much depends upon what is in your contract of employment and whether the pay increase came with written conditions attached with regards to the 'hours team'. In the first instance, you would have to speak with your employer if you do not agree with the changes made in your contract. Please also see link here, which shows your options if you feel you are in the right and your employer is in the wrong.
WorkingRights - 20-Feb-18 @ 10:06 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
digi - Your Question:
Hi. I'm working in the care home as a senior care assistant. 10 days ago all employees received a letter with information that owner is closing down care home we are working in. It says " Please accept this letter as notice to terminate your employment contract.; care home will be close on 23th February 2018". We all received same letter, some of us have a written contracts, some only verbal one. Employer is now cutting our hours without discussion or warning. I used to work over 30h per week ( I was promised 30h per week after I was offered this job) and now I have only 16 h this week and 0 next week. Few of my colleagues are in the same situation. Is it legal ? As far I'm concerned my contract ends on 23rd Feb so can employer cut my hours in the last few weeks , or even not offer any hours at all? Thank you very much for your advice. Kind regards

Our Response:
You can see more via the Working Rights link here and here which should explain more. Much depends on what type of contract you have and whether your contract allows this. Therefore, you may wish to approach ACAS if you have any further questions regarding your rights.
WorkingRights - 6-Feb-18 @ 10:25 AM
Hi. I'm working in the care home as a senior care assistant. 10 days ago all employees received a letter with information that owner is closing down care home we are working in. It says " Please accept this letter as notice to terminate your employment contract ..; care home will be close on 23th February 2018". We all received same letter, some of us have a written contracts, some only verbal one. Employer is now cutting our hours without discussion or warning. I used to work over 30h per week ( I was promised 30h per week after I was offered this job) and now I have only 16 h this week and 0 next week. Few of my colleagues are in the same situation. Is it legal ? As far i'm concerned my contract ends on 23rd Feb so can employer cut my hours in the last few weeks , or even not offer any hours at all? Thank you very much for your advice . Kind regards
digi - 5-Feb-18 @ 10:50 AM
My hrly rate is above the NMW. Employer has started to pay back pay for sleep shifts done. The calculation they are using either reduces my Hrly contracted rate to £7.50 or the hrly rate for the hrs on the sleep shift paid below the NMW. Employees on NMW get their Sleep shift hrs paid at NMW. Is this allowed.?
Buddssie - 29-Jan-18 @ 8:29 PM
Can your boss use ur annual leaveto make up ur contracted hrs
JJ - 20-Jan-18 @ 11:13 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
dippy - Your Question:
If your contract is a Monday to Friday working week.and you book day Friday off for a holiday.and the company decided to close on that day without notice to you.do I loose that days holiday entitlement.even though it was my decision to close

Our Response:
You would have to discuss this with your employer directly. If your company closed and all staff were given the day off as a result and it was not taken from their annual holiday allowance, you should be re-imbursed your holiday day.
WorkingRights - 22-Dec-17 @ 11:53 AM
If your contract is a Monday to Friday working week ..and you book day Friday off for a holiday..and the company decided to close on that day without notice to you ..do I loose that days holiday entitlement..even though it was my decision to close
dippy - 22-Dec-17 @ 7:39 AM
MicChru- Your Question:
Hello, I'm working on night shift from 6pm to 6am. Last year my company informed us that they cut our pay rate from 4am to 6am as a day shift rate. We didn't sign any contract changes or any papers according to pay deduction. Is it legal or not?

Our Response:
You would have to read the terms and conditions of your employment contract to see whether your employer is put a clause in the contract that allows a change to your hours of work. However, if there is, this would still have to be negotiated and a new contract drawn up if the change was to be permanent. You may wish to read your contract and then give ACAS a call to see whether you have any recourse to claim back pay for the outstanding amount, if there is no clause in the contract to say hours can be changed.
WorkingRights - 19-Dec-17 @ 12:34 PM
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