Whether the reason was due to issues with company cash flow, a recession, or a demotion, a decrease in pay can be stressful and lead to financial uncertainty. If your employer cut your hours or reduced your wages, it’s important to know your legal rights. While a pay cut isn’t always fair, it doesn’t always constitute an illegal pay reduction in Ohio — unless the reduction is based on discrimination, retaliation, or another unlawful reason.

Are Pay Cuts Lawful in Ohio?

An employer can legally reduce your pay in Ohio without prior notice at any time, unless an employment or union contract states otherwise. For example, if you originally took a position that paid $35 an hour, your employer may switch you to another position at the company where you only make $25 an hour. Although this may not be fair, it is legally permissible as long as the reason for the demotion is not discriminatory or retaliatory.

Significantly, there are specific laws in place when it comes to whether an employer can legally reduce your pay. Your employer must still pay you at least minimum wage for each hour worked and comply with the overtime requirements, unless you are classified as an exempt employee. In addition, your pay can only be cut moving forward — it cannot be reduced for hours that you have already worked.

When is it Illegal for an Employer to Reduce Your Pay?

Not all pay cuts and work hour reductions are permissible. It’s essential to be aware that there are several situations in which employers may be violating the law if they reduce your pay or take shifts away from you. Notably, the following circumstances may constitute an illegal pay reduction in Ohio:

• Retroactive pay reductions — Employers are not permitted to retroactively reduce your pay. In other words, they cannot legally apply a pay reduction to hours that have already been worked. A new pay rate can only apply to future work.
• Breach of contract — Often, an employer and employee will sign a contract at the beginning of the employment relationship that outlines compensation, hours, and other terms. If an employer reduces your pay or hours in violation of a provision in an employment agreement, you may have a claim for breach of contract.
• Discrimination or retaliation — It is against the law for an employer to cut your pay for a discriminatory reason based on a protected characteristic, including race, gender, religion, or disability. Pay cuts in retaliation for engaging in legally protected activity, such as whistleblowing, also qualify as illegal pay reductions in Ohio.
• FLSA violations — An employer cannot reduce your pay below minimum wage, refuse to pay you overtime for hours worked over 40 in a week, or fail to comply with the Fair Labor Standards Act.

If you are unsure whether your employer’s actions count as an illegal pay reduction in Ohio, it’s best to discuss the facts and circumstances of your case with an employment attorney. They can advise you whether your employer violated the law and what your legal options are.

What Can You Do if You Were Subjected to an Illegal Pay Reduction in Ohio?

If you believe your employer illegally reduced your pay, you should first review any contract you signed with your employer. Look to see whether there is a provision concerning pay changes. Your employer is required to honor any contractual terms that guarantee specific pay or hours. Their failure to do so can provide you with the grounds you need to commence a lawsuit to recover the wages you are owed.

Absent an employment contract, you may still be able to take legal action against your employer for an illegal pay reduction in Ohio. But before you do so, you should address the issue with your employer. The pay reduction may simply be an error or oversight that can easily be resolved. In addition, communicating with your employer shows that you attempted to work out the issue internally — this can show good faith and help strengthen your case. If you cannot resolve the issue with your employer, you may be eligible to file a wage claim with the Ohio Department of Commerce.

Depending on the facts of your case, you may also be entitled to file a lawsuit in court to recover back pay for the reduced wages and other damages. It’s essential to carefully document your pay reduction case to establish your employer’s violation of the law. Be sure to retain copies of any contracts, work schedules, and correspondence with your employer. Keep a detailed log of all conversations with your employer and collect your pay stubs to demonstrate the reduction in your wages.

Contact an Experienced Ohio Employment Attorney

If you have questions about whether your employer can legally reduce your pay, an employment law attorney can evaluate your case and ensure your rights are protected. Located in Westlake, Lalak LLC provides reliable counsel to employees for a variety of employment matters, including illegal pay reductions in Ohio. Contact Lalak LLC today to schedule a free, confidential, no-obligation consultation with an experienced employment attorney and learn how we can help.