Can an employer reduce an employee's wages? “An employee would accordingly be able to claim that the employer had breached the Fair Work Act and seek not only back pay but also potential penalties against the employer,” she told HC. This limit does not apply to your final pay if you leave your job. This decision is therefore one the employees in questions will have to consent to. During this time, sit down with the job offer and determine whether it’s a fair offer. There are rules in place relating to changes of any of the terms of the contract. This is our beta website. If an employee’s pay is reduced illegally, you can face up to $12,000 in fines. The employer must pay you the agreed-upon salary for work you've already done. Many of your fellow UK business leaders … For example, they can’t reduce your pay because they pay someone who already works for them in a similar role less. However, there are circumstances where it is permissible to do this. By Ben Power, 23 January 2019. If your employer is insolvent, you can contact the Redundancy Payment Service (RPS) to check if you can claim some or all of the money you're owed. Pay your bill; News and Events. In England and Wales, workers are legally protected from dismissal, including constructive dismissal, and you could be entitled to make a … There is a view that you may be able to reduce an employee’s salary as part of a performance management process if there are explicit provisions in an employment contract to that effect. Reducing an employee’s pay can be a risky move. An Acas adviser can talk you through: whether you can make a change ('variation') to an employment contract; the steps in the process and a flowchart with links to further resources I was on a full-time salary for 2 years, and i've gone back part time. Normal notice applies when employment is being terminated due to redundancy. My question is, can my company reduce my salary in line with my reduced duties? The Working Time Regulations 1998 implemented the provisions of the Working Time Directive, thus providing workers with the right to paid holidays. 5. Give now to The Sun's NHS appeal Employers and their staff should try to solve disputes about contract changes by talking informally or through mediation. Employers are legally entitled to recover an overpayment by deducting it from future wages, after discussion with the employee. Ultimately, it's your employer's decision to furlough you and the government can't force companies to do so or penalise them for not doing so. If so, do I have any say over this or do I simply have to take it on the chin? If you like, you can tell us more about what was useful on this page. This means your employer will reduce your working hours, or your work days each week, on reduced pay. I've been back at work for 2 months after maternity leave. What you can do is ensure your employer has confirmed (in writing) that the reduction is temporary. You can do it. A contract of employment is an agreement between you and your employer that outlines the rights and duties of both sides.. At some stage your employer or you might want to change your contract of employment. Can your employer fire you if you don’t accept a pay cut? Did you get the information you need from this page? Can my employer reduce my salary to save costs? It gives your employer the chance to: Your employer can only make a deduction from your pay if: Check any written agreements to see if a deduction is allowed. If you do not agree your employer can still terminate your contract or make you redundant. No employer can stop you from chatting about salary, so all you have to overcome is the weight of our cultural discomfort with honesty around earnings. Your employer also has no obligation to consider furloughing you instead of reducing your salary. The guidance explains about how tips and the national minimum wage work, and looks at how tips can be collected and shared. We listen to your questions with care to get a full understanding of the issue before giving you clear advice based on the ACAS Code of Practice. Find out about the laws in place to protect … An employer cannot reduce any employee's salary to below the current minimum wage. They should contact you as soon as they're aware of the mistake. Can my employer reduce my salary because I have resigned? How to write a grievance about unauthorised deductions from your wages or salary. You can do it. Now my employer has told me that the sum is wrong. In the North Malaysia Distributors Sdn Bhd case mentioned above, the employer reduced staff salary due to the economic downturn with promise of it being reversed once the economy recovered. Where this is the case, an employer may reduce the employee's pay in line with the minimum wage rates. Rights an employee has if they work more hours than their contract says. Can my employer ask me to take a lower salary? The question of whether an employer can reduce an employee’s salary to make up for the superannuation guarantee charge (SGC) increase allows me to introduce some FW Act provisions which, in my experience, many employers do not know about. Employers can only tell you to reduce your hours if it's already outlined in your contract saying that they can. Before you resign, you should consider if you might be better off putting up with the change while you look for another job. Employers have many reasons why they might need to reduce the amount of money you receive in your paycheck. Solicitors in Fareham; Solicitors in Southampton ... employer. Please do not include any personal details, for example email address or phone number. Part 2.9 Division 2 of the FW Act imposes rules about the payment of wages and what you can … Speak to an employment law expert today and get instant advice based on the ACAS Code of Practice. Solicitor: Ben Jones, UK Lawyer replied 9 years ago. If you’ve been transferred to a new employer, they aren’t allowed to make a change to your contract if it’s directly related to the transfer. Can an employer reduce hours at work? Acas helpline Telephone: 0300 123 1100 Textphone: 18001 0300 123 1100 Monday, Wednesday and Thursday, 8am to 8pm Tuesday and Friday, 8am to 6pm Saturday, 9am to 1pm If employers choose to top up salaries in this way, we recommend adopting a consistent approach to avoid unfair treatment of other employees. What to do if my salary is being reduced. 24/7 TUPE Advice \Free for Employers; About Employers Direct; ACAS-Based … And unlike ACAS opening hours, we’re here to take your call 24/7. Search for: Pages. Ben Jones, UK Lawyer. You can do it. Pages are being tested and improved. 2. It will largely depend on the terms of your contract as to whether your employer can reduce your hours and pay. We tell you what you need to know in a phone call. If you are on a zero-hours contract for example, there is unlikely to be any rights to be provided with work or pay (even in these circumstances, you should seek advice). Yes, it’s legal—so long as you can justify your need to do so. Bear in mind, Frank, that you can also say to your employer, “Starting next month, unless I get a 2% increase in my commission rate, I am taking a different job.” It’s a two-way street. What you can do is ensure your employer has confirmed (in writing) that the reduction is temporary. The right to sick pay and how much an employer must pay an employee when they're off sick. If your employer wishes to bring in a change, they usually need to consult with you. Back in March I was offered a new position within the company with an increased Salary which would take effect as of September. 19th March 2011 From India, Calcutta [email protected] 2. Show More. In Northern Ireland, they can get advice from the Labour Relations Agency (LRA) . Employees can also get advice from their trade union representative (if they’re a member of a union), Citizen’s Advice or Acas (Advisory, Conciliation and Arbitration Service). Answered in 5 minutes by: 8/9/2011. Check if your employer can make deductions from your wages. In difficult economic times or periods of poor business performance, employers may ask their employees to take a pay cut. You won’t hear any confusing jargon, either. it is required or permitted by a statute or contract term; or . Doing this is not a legal requirement but can help to keep their processes simple and understandable. Ask Your Own UK Law Question. Coronavirus (COVID-19): latest advice for employers and employees. Read more. The only exception is where your contract of employment reserves the right to vary your pay and hours, however even then any such variation would need to be reasonable and for solid business reasons. The employer must pay you the agreed-upon salary for work you've already done. This means that a pay cut can only be unilaterally applied across a workforce if each staff member agrees to it. Email RPS on redundancypaymentsonline@insolvency.gov.uk. In other cases there may be a provision in the contract that provides for a reduction in pay. What to do if my salary is being reduced. my question is can a company reduce salary of a employee on non performance ground with out any notice or letter. Show Less . When it comes to exempt employees, pay can be reduced based on long-term business interests. If the overpayment was a long time ago, or overpayments have been going on for several weeks or months, your employer should: Speak to an Acas adviser to discuss your options if you: If you disagree with a deduction you should first try to resolve it with your employer. Part 2.9 Division 2 of the FW Act imposes rules about the payment of wages and what you can … Where this is not the case, your employer cannot reduce it without your agreement, as this would change the terms of your contract of employment. However, neither you or your employer can change your employment contract without each others' agreement. Supporting mental health in the workplace, Dealing with a problem raised by an employee, Check if your employer can make deductions from your wages, Maternity, paternity and adoption leave and pay. Trustpilot. Ask Your Own UK Law Question Customer reply replied 9 years ago Here we explain how an employer can change an employee’s contract without their consent. 6. “There’s a legal risk and there’s a non-legal risk.” Legal risk “The legal risk would be a claim for constructive dismissal,” she explains. Your employer can ask you to take a lower salary, however as this is a variation to your employment contract, both you and your employer must agree to it. In most cases employees should be paid their normal pay during the notice period. We’re here to help. If an employer attempts to reduce an employee’s salary without their consent, this will entitle the employee to take any of the following action: Resign from their position Pursue a claim for constructive unfair dismissal An employment contract can be terminated at any time by either party, it could be a resignation or dismissal, redundancy or retirement. It is illegal in the UK to impose a pay reduction without consent. Ask the employer if you can provide a response within the next 24 to 48 hours. This is to cover any mistakes or shortfalls, for example with cash or stock. In a salary reduction, an employer lowers the amount of pay that you receive as payment for the job you perform. However, if the employee with an outstanding obligation is about to leave the company, the employer can deduct the full amount from the last pay check. Can my employer cut my pay? You can claim up to 2 years back as long as there is not a gap of 3 months or more between deductions. The question of whether an employer can reduce an employee’s salary to make up for the superannuation guarantee charge (SGC) increase allows me to introduce some FW Act provisions which, in my experience, many employers do not know about. This is the most important rule in salary reductions. The law on equal pay, and how men and women must get equal pay for doing equal work. You can view the archived version of this advice on The National Archives website. Changes to a contract of employment. The argument is that the employee has agreed to the possibility of a pay-cut by signing the contract in the first place. Your employer should not reduce your hours and/or pay without following the correct procedure. Generally, it is unlikely an employer will be able to lawfully impose a pay cut without consulting with employees first. All workers in the UK must receive an additional 1.6 weeks of leave by law, and some receive more as part of their terms and conditions of employment. Protect your business with free employer advice based on the Acas Code of Practice. If several deductions were made in a row, you have to claim within 3 months of the last deduction. Ultimately you are stuck between a rock and a hard place—your employer does not need your permission to reduce your wage and the choice to treat it as a dismissal may not be a choice at all. For example you might have agreed to pay back part of a travel season ticket loan if you leave. Under current law, the predetermined contract of an exempt employee can be adjusted should the employer face financial … Share this conversation. Satisfied Customers: 70,873. We cannot respond to questions sent through this form. Also, after the four weeks could my employer then reduce my salary further by putting me on Statutory Sick Pay even though I … Select the statement you most agree with: Supporting mental health in the workplace, Dealing with a problem raised by an employee, Please tell us why the information did not help, I cannot find the information I'm looking for. They have deducted the 'excess' amount from my last pay packet, and from next month will be reclaiming the excess paid over the last 6 months. based on your reduced salary. It is against the law to make a deduction from wages unless either: . Bosses can absolutely lower salaries just like they can raise salaries. Is this legal? Workers also cannot be required to work additional hours without fair compensation. Your employer can take a maximum of 10% of your weekly or monthly gross pay (your pay before tax and National Insurance) if you work in retail. If your employer only made one deduction, you need to make a claim to an employment tribunal within 3 months of the deduction. It will largely depend on the terms of your contract as to whether your employer can reduce your hours and pay. And if so, under what circumstances? Can my new employer change my terms and conditions after a TUPE transfer? Seems unfair? If you decide to resign. Consulting in advance can help your employer map out who is most likely to be negatively affected by the planned change, and take steps to reduce this negative effect. You can also talk to us on 01455 858 132. But is this legal? We’ll take you through your options. Your employer can choose to pay the remaining 20 per cent of your wages, although it is not obliged to do so. How to write a grievance about the behaviour of a colleague, manager or supervisor ... Use the ACAS discrimination questions procedure, raise a grievance or file a tribunal claim. For a pay cut to be imposed on any employee, their consent must first be given in order for the reduction to be legal. If you are on a zero-hours contract for example, there is unlikely to be any rights to be provided with work or pay (even in these circumstances, you should seek advice). The government it currently paying 80 per cent – up to £2,500 a month – of the wages for around 6.3m… Rules employers must follow when making staff redundant - consultations, notice periods, compulsory and non-compulsory redundancy and redundancy pay During times of financial difficulty, some businesses may try to reduce their overheads by reducing the amount that they pay in employee wages. Legally, an employer cannot impose a pay cut upon its employees if they have an employment contract that sets out details of their salary entitlement. Acas is often asked to work with organisations to understand options and alternatives and employer responsibilities when it comes to the process of terminating employment. Tips or gratuities do not count towards the National Minimum Wage but should be paid on top. Check if your employer can make deductions from your wages What to do if you have not been paid the amount you were expecting. An employee can be overpaid through payroll by paying a bonus that hasn’t been awarded, or paying too much overtime or commission. These are the two most common reasons why an employer might do a salary reduction. I signed a new contract confirming my hours and hourly rate of pay which was calculated by my employers and based on my previous salary. What are your pay obligations under the Fair Work Act? However, if you don't agree, your employer is not allowed to just bring in a change, but they can terminate your contract (by giving notice) and offer you a new one including the revised terms - effectively sacking you and taking you back on, following statutory procedure. And in this guide, we discuss the legalities behind reducing work hours. Pay for working extra hours Rights an employee has if they work more hours than their contract says. For example, you might be asked to work a three-day week, instead of a five-day week. An employer is generally not entitled to unilaterally impose on an employee a pay cut or reduced hours without your consent. Check when you can claim money back from an employee, for example overpayments or training costs. I think the alternative is to fire me and hire someone else at that lower rate. An employee can decide to accept a change, and many terms of the contract are, of course, varied from time to time by mutual consent, for example a pay increase . Find out how we can help Redundancy and notice: how Acas can help Your employer must let you know in writing if you owe them money. An employer would also need to ensure that any reduction in pay did not fall below the national minimum wage … Why someone's pay is often different when they leave a job, including how holiday entitlement affects final pay. Please note, any changes you make to your pension contribution will be permanent and you will need to advise us again if you wish to change them in the future. If you wish to change your contributions you will need to advise Payroll of this by emailing payroll@robertson.co.uk. It’s important to get advice first becaus… Don’t Be the First to Share a Number. How to write a grievance about unauthorised deductions from your wages emailing @! Right to claim within 3 months of the working time Regulations 1998 implemented the of. The National Archives website its assurance, the employee 's pay in with. 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