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  1. #1
    Join Date
    Nov 2013
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    1

    Default Can an Employer Reduce Your Wages

    My question involves employment and labor law for the state of: California.

    I am working for Company A through Staffing Agency B, as in Staffing Agency B pays me (I am a W2 contractor) for work I do for Company A. I have worked with Company A for a year now. A little over half way through my employment I got another job offer for Company C. Company A made a counter offer and I accepted. A few months later (now), Company A is saying I need to either convert to an employee (not going through Staffing Agency B) at a decreaed salary or decrease my rate through Staffing Agency B.

    It's unfortunate and unfair (and looking back I should have probably accepted with Company C), but is that legal? It seems as though they just matched the offer to keep me, and now are bringing the offer back down.

  2. #2
    Join Date
    Jan 2006
    Posts
    38,867

    Default Re: Decrease in Pay - is This Legal

    yes, it is legal.


    Your employer can change your wage rate anytime they wish to as long as there is not a contract prohibiting it. (and with proper notice requirements)

  3. #3
    Join Date
    Jun 2006
    Location
    Massachusetts
    Posts
    24,521

    Default Re: Decrease in Pay - is This Legal

    As an employee, you cost them more than you do as an agency temp. Now suddenly your benefits and workers comp and unemployment are the employer's responsibility and not the agency's. It's by no means unusual for a rate to be decreased when the agency is no longer a factor. And if they decide to lower your rate through the agency? Well, the agency may have something to say about that - they're not in business to provide a public service, after all - and it may involve them replacing you altogether, with someone who can start at the lower rate.

    So think long and hard - and talk to the agency - about how you want to handle this. It's legal AND it's half-way decent business sense.

  4. #4
    Join Date
    Mar 2012
    Posts
    1,360

    Default Re: Decrease in Pay - is This Legal

    If the pay cut is 20% or more, you can attempt to adjust your grievance, and refuse the offer and opt for unemployment as a consolation prize. However, don't wait too long because working for much more than one pay check is usually looked on as you having accepted the adverse change, and you must have agreed to it, or you would have quit.

    You don't say how much you make, but if you're the second income in the household, take the kids out of day care, have substantial transportation expenses or high marginal tax rate, you might find that UI is very tollerable until you find something more in line with what you were making before.

  5. #5
    Join Date
    Oct 2006
    Posts
    16,474

    Default Re: Decrease in Pay - is This Legal

    Quote Quoting cbg
    View Post
    As an employee, you cost them more than you do as an agency temp. Now suddenly your benefits and workers comp and unemployment are the employer's responsibility and not the agency's. It's by no means unusual for a rate to be decreased when the agency is no longer a factor. And if they decide to lower your rate through the agency? Well, the agency may have something to say about that - they're not in business to provide a public service, after all - and it may involve them replacing you altogether, with someone who can start at the lower rate.

    So think long and hard - and talk to the agency - about how you want to handle this. It's legal AND it's half-way decent business sense.
    I think much depends on what the staffing agency's rates are. Its not always cheaper for a company to use an agency, because an agency has to make a profit too.

  6. #6
    Join Date
    Jun 2006
    Location
    Massachusetts
    Posts
    24,521

    Default Re: Decrease in Pay - is This Legal

    Even so, when you add in all the additional costs, the overwhelming likelihood is that the agency is going to be cheaper in the overwhelming number of cases. I suppose if you looked really, really hard you might find an occasional one-off exception so that you can find something to correct me on, but in the vast majority of issues, the agency is going to be cheaper in the long run. That's why agencies exist.

    None of which changes the answer to the OP's question, which is, IS IT LEGAL? Yes, it is legal.

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