Watch CBS News

My company cut my pay -- what can I do?

Everybody wants an annual raise (and this year, there's reason to believe you'll be getting one). Sometimes, though, your boss doesn't bestow more money on you, but less.

This is completely legal as long as it affects your future pay, and not retrospectively, and you're still making at least minimum wage. (That is, your boss can say, "Starting today we're paying you $5,000 less per year," but can't say, "Oh, by the way, the paycheck you get today will be less because we cut your pay $5,000 per year.").

What do you do if this happens to you? I received this email from a reader:

I just received a review, and my manager told me they are cutting my pay by $2.50 per hour. I am an hourly employee and I understand $1 [reduction in pay] was because a certificate has lapsed. When I asked her about the $1.50 a hour she was cutting off my pay she said, "you can't go anywhere else around here and make what you were making," when in fact I went on, and after being with the company for almost 10 years I was making 52 cents more per hour than the median range. Now I'll be considerably below. I am also responsible for tasks which are not required for other employees that she deems at my same level. No other employee was required to take a pay cut. Do I have anything to go on here, or do I have to suck it up and deal with a terrible employer until I can find a better one?

The reality is this is a huge flashing sign that your employer doesn't value you. Employers like this tend to think that employees are interchangeable: If your workers aren't cutting it, you can just go out and hire some new ones. Sometimes this is absolutely the case, other times it's a disaster. But the message is the same -- we don't value you.

Now, this is vastly different from a situation where everyone (including leadership) is getting a pay cut in order to keep the business afloat. The message there is that we're all in this together and we feel it's better to cut everyone's pay than to start laying people off. (If leadership doesn't also take the pay cut, the message remains "we don't value you.")

So, yes, start looking for a better employer -- immediately. But consider that your boss is right about your salary and that you are overpaid. Turnover costs are high, and in most cases it's cheaper to keep a current employee than replace that person, even if it's at a lower salary. But because turnover costs are hidden, many managers don't realize this. You may go out and look and find out that you can't make more money elsewhere.

But, generally, once your boss has made the decision to cut your salary -- and only your salary -- you should get out at the first reasonable opportunity. Because a boss that cares about you knows that this type of blow is devastating, if not financially, then certainly emotionally. So, chances are that even if you have to take a new job at an identical pay rate to the cut one, you'll be better off at a company that wants you enough to give you a raise.

Have a workplace dilemma? Send your question to

View CBS News In
CBS News App Open
Chrome Safari Continue
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.