Human Resource Blog

Can the boss demote an employee and cut his pay

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I recently found out that the company owner boss is going to demote an employee to a lower position. He has stated this verbally and announced that the employees wage will be reduced as well. The employee is a fleet maintenance assistant and they want to demote him to a scheduler and cut his pay. Is that even legal?

It is completely legal for an employer to demote an employee and reduce the employees pay, as long as the employee knows about it ahead of time. Ideally, the employee would be informed in writing of their new title, job description and wages. It sounds like in this case, the owner informed the employee verbally and was sketchy about the details. That is not a good idea.

Companies often demote employees for financial reasons, when they are eliminating higher-paid positions. At other times, employees are demoted due to poor performance, or an inability to do the job in their current position.

When an employee quits because their wages or working conditions have been drastically altered by the employer, in many states the employee can collect unemployment benefits.