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. Coronavirus (COVID-19): latest advice for employers and employees. However, feelings aside, sometimes your employer needs to reduce your paycheck for a variety of reasons. Where this is the case, an employer may reduce the employee's pay in line with the minimum wage rates. Acas support for your organisation. 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. Generally, it is unlikely an employer will be able to lawfully impose a pay cut without consulting with employees first. If not, your employer will have to negotiate a change to your contract. This is the most important rule in salary reductions. 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. News; Events; Contact. Can Employers Top-Up Furlough Leave Pay? Can my employer reduce my wages? Your employer also has no obligation to consider furloughing you instead of reducing your salary. Please call Employers Direct on 0800 144 4050. So, can you legally reduce employee hours? 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 Acas provides free and confidential advice to employers, employees and their representatives on employment rights, best practice and policies, and resolving workplace conflict. If you decide to resign. 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. What are your pay obligations under the Fair Work Act? If your employer only made one deduction, you need to make a claim to an employment tribunal within 3 months of the deduction. Find advice on our previous website for tips and gratuities at work. manager level and salary is around 30k. Part 2.9 Division 2 of the FW Act imposes rules about the payment of wages and what you can … Bosses can absolutely lower salaries just like they can raise salaries. There are rules in place relating to changes of any of the terms of the contract. And if so, under what circumstances? Generally, reducing an employee’s wage is seen as unfair and unethical. This means that a pay cut can only be unilaterally applied across a workforce if each staff member agrees to it. 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. I think the alternative is to fire me and hire someone else at that lower rate. What you can do is ensure your employer has confirmed (in writing) that the reduction is temporary. An employee can be overpaid through payroll by paying a bonus that hasn’t been awarded, or paying too much overtime or commission. 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. It may feel that way. The law on equal pay, and how men and women must get equal pay for doing equal work. Changes to a contract of employment. An employer can force a new contract on employees, although this should be a last resort and could lead to legal action. Employee Rescue Guides, together with our Documents and Templates provide you with key employment law knowledge to assist you in addressing problems at work and on termination. You can view the archived version of this advice on The National Archives website. “There are two real risks when it comes to reducing an employee’s salary or changing their bonus scheme,” says Dentons’ Catherine Coulter. These are the two most common reasons why an employer might do a salary reduction. You can do it. Seems unfair? In most cases employees should be paid their normal pay during the notice period. Check if your employer can make deductions from your wages What to do if you have not been paid the amount you were expecting. Your Organization Is Experiencing Economic Challenges An organization that is experiencing economic challenges may ask you to take a salary reduction. Can your employer reduce your hours, or lay you off? Can my employer reduce my salary because I have resigned? 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. 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 Speak to an employment law expert today and get instant advice based on the ACAS Code of Practice. Procedure to follow in the event of deductions . 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. Read more. 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. Rights an employee has if they work more hours than their contract says. But is this legal? 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