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Can Employer Cut Wages Without Warning?

By: Maggie Lonsdale BA (hons) - Updated: 17 Jan 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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[Add a Comment]
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
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?
MicChru - 19-Dec-17 @ 2:09 AM
Lyns - Your Question:
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?

Our Response:
If it has been custom and practice for bonus payments to be made to you (even though there is no discretionary bonus clause in your contract) - the payment can be deemed to have a contractual status due to the repeated payments. You would have to seek further advice from your trade union representative, or ACAS to see whether you have any recourse to complain.
WorkingRights - 12-Dec-17 @ 3:33 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
cgrlysdy - Your Question:
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.

Our Response:
Much depends upon the terms of your contract, which you would be advised to read. You may wish to give ACAS a call for more advice if the hourly wage your employer is paying you is different to the wage outlined in your contract. If this is the case, you may have grounds to claim the money back
WorkingRights - 30-Nov-17 @ 10:52 AM
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
potdog1977- Your Question:
My daughter is on a zero hour contract for a pharmacy and was on £7.50ph. Now through an e mail she has been told it will be reduced to £5.60ph,is this legal as she has never agreed to the deduction in wage. Thanks in advance.

Our Response:
You don't say what the reasons are for the reduction. Is it that she has just started work and was told she would be paid the national minimum wage for her age which would be £7.50 for workers aged 22 and over, and £5.60 for those workers 18-22? However, if your daughter is older than 22, she can refuse to be paid below the national minimum wage for her age. You may have to speak to ACAS directly to see whether her employer is right or wrong in this instance.
WorkingRights - 16-Nov-17 @ 12:14 PM
I have a signedcontractas a yard supervisor just been told I'm no longer supervisorand my wages r gone be cut .. is this legal
Deano - 15-Nov-17 @ 8:47 PM
My daughter is on a zero hour contract for a pharmacy and was on £7.50ph. Now through an e mail she has been told it will be reduced to £5.60ph,is this legal as she has never agreed to the deduction in wage. Thanks in advance.
potdog1977 - 15-Nov-17 @ 6:53 PM
Martyn - Your Question:
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.

Our Response:
In this case you would have to give ACAS a call. Much depends upon whether you are self-employed, employed and/or what you have agreed to by signing your contract. However, if you are self-employed then ACAS cannot help as if you have agreed to these terms with your employer, there is little you can do.
WorkingRights - 30-Oct-17 @ 10:56 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
Hi I am a sub contracted supervisor at a building company. I have a site manager that normally works along side me. We agreed that when he was with me I would get a lower rate. But when I'm on my own my rate would go up. I have been running the shift for almost 2 weeks now on my own and he is saying he might not be able to pay me the full rate. What are my options in this Thank You
Paul - 13-Oct-17 @ 4:24 AM
I am conttacted only to work for 36 hours but my rota linewhich my employer gave me and expected me to do was 64 hours per weekand I am hapayi to this for themoney . Recentlymy bossesgot the bith with me becausethey wanted me to work more overtimebecauseI wouldon't not they cut my hours by 5 hours with = 50 pounds per weekcan they do that
Tas - 26-Aug-17 @ 9:15 PM
I have just been informed by email that i have had my hourly rate put back down due to me being put back on the tools. This happened when i went back to my usual place of work after working 6 straight weeks away for my company. This was all done without prior warning or explanation as to why this is being done. I am an agency worker and signed a contract in april 2017 ( which we have to do yearly )at my previous rate , i also had to sign a contract for the 6wks away as there was a revised rate for working away from home. Is this a legal action from my company or should i be given prior notice and reason for the reduction.Thanks
Spani - 24-Aug-17 @ 11:47 AM
Hi our boss cut our wages 5 years ago by 10% and we never got it back even though he said it was temporary he's now cut them again buy 20% of our Salary but this time say we work 36 hours he will pay us for 80% of them then the others go in a flexible bank to use when it's quite so 1week we might only work 20hours but get paid 29 . This doesn't help pay the bill though
Keighley town - 15-Aug-17 @ 11:13 PM
Jimmy - Your Question:
Hi thanks for getting back to me. As far as I'm aware he is paying tax and national insurance on my behalf as I get holiday pay! Ive never signed or seen a contract of employment and I've never received a pay slip? Thanks

Our Response:
You would have to take this up with your employer directly by asking him what your contracted hours per week are and asking for an written employment contract. Your employer is by law obliged to give you a written employment contract within two months of you starting the job. Unless you are on a zero hour contract he/she is not entitled to withhold wages (from the contracted hours) unless previously agreed. You can see more via the gov.uk link here.
WorkingRights - 11-Jul-17 @ 2:27 PM
Hi thanks for getting back to me. As far as I'm aware he is paying tax and national insurance on my behalf as I get holiday pay! Ive never signed or seen a contract of employment and I've never received a pay slip? Thanks
Jimmy - 11-Jul-17 @ 11:09 AM
Jimmy - Your Question:
Hi I work for a builder we normally start work at 8.00am-4-00pm. One day this week we were finished for 2 o'clock and he told us to come home as there was nothing else to do, when I received my pay it was £20 less than normal! I am wondering he he's allowed to pay me less without my consent or telling me about it beforehand? I've been working for him for 3 years and never had a pay slip from him either and no contract with him either so don't really know where I stand! Thank you for any advice

Our Response:
Much depends what type of contract you were employed on and whether your employer is paying tax and National Insurance on your behalf. You need to speak with your employer directly regarding this matter. As an employee, you are entitled to ask for a written contract. If you were employed on a permanent contract and can prove this, then you could take this matter to an employment tribunal. However, if you are not employed on any contract and if your employer is not paying tax and NI, then you have no immediate rights, apart from to take legal advice to see whether you may be eligible to claim.
WorkingRights - 3-Jul-17 @ 2:50 PM
Hi I work for a builder we normally start work at 8.00am-4-00pm. One day this week we were finished for 2 o'clock and he told us to come home as there was nothing else to do, when I received my pay it was £20 less than normal! I am wondering he he's allowed to pay me less without my consent or telling me about it beforehand? I've been working for him for 3 years and never had a pay slip from him either and no contract with him either so don't really know where I stand! Thank you for any advice
Jimmy - 1-Jul-17 @ 8:21 AM
I HAVE BEEN WITH EMPLOYER FOR 17 YEARS AS A SUPERVISTOR.MY HOURLY RATE WAS 87 PENCE AN HOUR MORE. BUT HAS THE MINIMUM WAGE HAS GONE UP THE DIFFERANCE IN MY WAGES HAS GONE DOWN TO ONLY 40P AN HOUR AS A SUPERVISTOR WITHOUT TELLING ME CAN THEY DO THAT.
PEDRO - 7-Jun-17 @ 9:43 AM
i have recently had some time off from my job due to being ill, i woke up this morning to a text from my boss saying that he is cutting my hourly rate down to minimum wage for my night position because of this, is this even legal..? i have requested a copy of my contract to see if there is anything written in there that allows them to do so
matty - 1-Jun-17 @ 2:36 PM
Iv been working as a chef with a company in for 16 odd months have never had on day off sick iv recently have had to take 3 days of due to feeling unwell and stressedi had been told by another member of staff that i would have no hours the following week if I didn't return to work by tomorrow even know I'm contracted to 50 hrs a week Ihad been promoted to team leader in the kitchen 8 months ago so had extra responsibility I had a pay rise as well of 40 pence a few months beforminimum wage increased so i went from 7.20 to 760 an hertafter minimumwage went up was told my pay would increase to 8 pound and hour after a couple of week I never receivedbut was constantly told I'd receive it and that he was waiting for head office to confirm I checked my pay slip to find out my pay had decreasedfrom £7.60 to £7.50 with out no one notifying meeven know I had been told my pay had been put threw to go up to 8 pound , i work a very stressful job and am expected to take charge of my team and have more responsibilities than other staff in the kitchen and feel like I am doing more than I should I'm a bit unsure of my work right but feel miss treated, would be very grateful for advice thank you
mrjones9 - 28-May-17 @ 1:22 AM
Chelley1234 - Your Question:
I have been working for a school for 10 years, my hours of employment are 27.45 hours per week and I am paid 39 weeks a year. Recently our school has financial/budget defercit, all other teaching assistants have part time contracts, I am the only TA with a full time contract. Other TA's have been able to claim overtime upto full time hours over the last few years. Today we where told no overtime can be paid and we have to work our contracted hours only. This didn't effect me as I don't do overtime. We then had an interview with our head teacher. She told me that although overtime has been cut, she can legally cut all members of staff ( teaching assistants only) 10 percent of their working contract. I will loose 2.45 hours per week, which means I will loose £95 pound per month. I live on a very tight budget and can't afford for this to happen, can you help ? Is this procedure correct. Thank you

Our Response:
Much depends upon the terms of your contract which will tell you if your employer can make wage changes.
WorkingRights - 16-May-17 @ 12:03 PM
I have been working for a school for 10 years, my hours of employment are 27.45 hours per week and I am paid 39 weeks a year. Recently our school has financial/budget defercit, all other teaching assistants have part time contracts, I am the only TA with a full time contract. Other TA's have been able to claim overtime upto full time hours over the last few years. Today we where told no overtime can be paid and we have to work our contracted hours only. This didn't effect me as I don't do overtime. We then had an interview with our head teacher. She told me that although overtime has been cut, she can legally cut all members of staff ( teaching assistants only)10 percent of their working contract. I will loose 2.45 hours per week, which means I will loose £95 pound per month. I live on a very tight budget and can't afford for this to happen, can you help ? Is this procedure correct . Thank you
Chelley1234 - 15-May-17 @ 6:12 PM
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