Home > Ask Our Experts > Can Employer Cut Wages Without Warning?

Can Employer Cut Wages Without Warning?

By: Maggie Lonsdale BA (hons) - Updated: 25 Oct 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.

You might also like...
Share Your Story, Join the Discussion or Seek Advice..
[Add a Comment]
I’m currently on SSP and have discovered in my September pay they overpaid me by £500+ my October payslip shows them deducting the full amount even though I’m on SSP.They have agreed to postpone this repayment until November however my wage is still only going to be £600 so to deduct the full amount all at once I cannot afford. Where do I stand legally on the amount I must pay back per month.
Golightly78 - 25-Oct-18 @ 5:32 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
BB - Your Question:
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!

Our Response:
If you are based in the UK, then as stated in the article, your employer cannot change your contract without agreement. Please see link here . You may wish to speak to your employer directly about any reduction first. Laws changed about pension deductions this year, so your wage may have reduced because of this.
WorkingRights - 16-Jul-18 @ 2:29 PM
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 work for an agency at zero hours contract since 2015. In November 2017 they increased my hourly pay from 7.50ph to 8.25ph, I only work for a client of the agency, always the same work, in the same building. in April 2018, the agency offered a payment of 11.75ph for a 3 day event, but they only paid me at 8.25ph. I already claimed the money but nothing, I did not receive the hourly payment difference for this specific event. soon this week I worked more 1 day as a normal day that should be at 8.25ph so I was paid at 8.00ph. now they lowered to 7.83ph by the same normal work for the same client, when they already paid me at 8.25ph .. they can do it without warning me ?? I already sent several messages to ask why they lower the rate per hour but they do not respond.
LInda - 4-May-18 @ 10:38 AM
Hi, I am 21 have been working in a sub post office (franchise) for over 6 months at national minimum wage not the wage for my age but the higher bracket. On getting my wage this month my boss has informed me she has deducted £190 from my wage because she has been overpaying me. I now can’t afford to pay my bills can she legally do this? No contract has ever been signed and she doesn’t give us a wageslip. She also paid cash instead of into the bank this month.
Jod - 1-May-18 @ 8:27 AM
Iulian - Your Question:
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?

Our Response:
Much depends upon whether you have agreed to the changes and why the changes have been made. If you disagree with the changes in your contract, your only recourse would be to try to claim breach of contract. In the first instance, trying to resolve this matter with your employer directly is the best option.
WorkingRights - 23-Apr-18 @ 11:54 AM
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 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
Share Your Story, Join the Discussion or Seek Advice...
Title:
(never shown)
Firstname:
(never shown)
Surname:
(never shown)
Email:
(never shown)
Nickname:
(shown)
Comment:
Validate:
Enter word:
Latest Comments