Can An Employer Change Pay Rate They Offered When Hiring?

Can An Employer Change Pay Rate They Offered When Hiring?

Here’s the situation: you were hired to a new position with the promise of a certain amount of pay, and now you’ve heard that your employer has decided to pay you a different amount. You might question whether this is legal — does your employer have to pay what they promised you? The short answer is yes. 

 

Your employer is generally obligated to follow through with the promises that they made upon hiring you, whether they were written down or not. Unless you have agreed to take a pay cut, you may be able to use the law to claim that you were not given what you were promised by your employer. 

 

This article will describe what an employment contract is and why it matters in this case, answer questions about your employer changing the rate of your pay, and tell you what legal solutions you may have if you have an issue with your employment contract. 

 

What is an Employment Contract and Why Does it Matter?

 

An employment contract, or employment agreement, is a contract made between an employer and an employee. It will detail things like the rate of pay, the work hours, and other important details about your job. An employment contract can be verbal or written, and it can be enforced even if it is not signed. 

 

If you don’t have a written employment contract, your employer will typically be expected to follow the rules of the Employment Standards Act (ESA) of Ontario. 

 

The employment contract is a fundamental part of any working relationship; if an employer makes changes to it, the changes must be agreed upon by both the employee and the employer. 

 

If an employer unilaterally decides to reduce an employee’s pay or pay them less than they promised, then they have changed a fundamental part of the working relationship. 

 

Can I Agree to Take a Pay Cut?

 

Yes, you can agree to take a pay cut. According to the ESA, an agreement to take a pay cut must be written. This is called written authorization. It should specify the money that is being deducted or a specific way to calculate how much money is being deducted. 

 

Even with written authorization, your employer cannot deduct from your pay if:

 

    • The pay cut is to cover “faulty work”. This might include work that is not up to standard or rejected by the employer, damaged tools or equipment, a mistaken credit card transaction, or other excuses to subtract from the employee’s pay based on their actions.
  • The employer has a cash shortage or has had property lost or stolen when the employee is not the only one with access to the lost or stolen property. A deduction can be made when the employee is the sole person with access to the lost or stolen property and the employer has gotten written authorization to give a pay cut. 

 

Remember that an employer cannot force you to take a pay cut. However, if you accept a pay cut, even without written authorization, and continue to work, it may be more difficult to argue your case. If you have been presented with a pay cut by your employer, consider reaching out to a qualified employment lawyer for advice. 

 

What If I Don’t Agree to a Pay Cut?

 

You may refuse to accept a pay cut. If your employer goes ahead and cuts your pay anyway, then they may have made a unilateral change to your employment contract. Since the change was unilateral and it alters the fundamental employment agreement, then you may be able to look to legal remedies to help you.

 

What are My Options?

 

If your employer refuses to pay what was promised in the employment contract, your first step should be to contact an employment lawyer. A lawyer will be able to tell you what your next steps should be and whether you should pursue actions against your employer.

 

If a lawyer has decided that your employer has not met the terms of your employment contract, the next step will likely be to write a demand letter, indicating that your employer should honour your employment contract to avoid legal action. A demand letter will put your employer on notice and let them know that you are serious about wanting the terms of your contract met. Your employer will ideally see that they have made a mistake and rectify the issue.

 

However, if your employer continues to pay you less than promised, then there are other options. Your employment lawyer will be able to tell you which options are best for you, but if things do not go your way, you may be able to resign and argue that there was a constructive dismissal. By changing the terms of your employment without your approval and making it less appealing to work for them, your employers will have forced you to resign, making it a constructive dismissal. It is very important to confirm that this is the case with an employment lawyer before handing in your resignation. 

 

If you are found to have been constructively dismissed, you could be entitled to severance pay in lieu of notice, which will help you get back on your feet as you find a new job. 

 

Conclusion

 

The amount that someone is paid is a crucial factor in where they work, live, and enjoy their time. Taking a pay cut can be particularly difficult, and in some cases, can give you room to argue that you were treated unfairly by your employer. There are steps that you can take to make sure that your employer honours your agreed pay, such as having an employment lawyer write a demand letter and making a case for constructive dismissal.

 

If you have experienced a cut in your pay at your workplace, make sure to contact an employment lawyer at Achkar Law right away to figure out your rights, abilities, and next steps. 

 

Contact Us

 

If you are an employee worried about your rate of pay, be sure to reach out to a qualified employment lawyer at Achkar Law. Contact us by phone toll-free at +1 (800) 771-7882 or email us at [email protected], and we will be happy to assist. 

 

If you are a small or medium-sized company looking for full-service support with a same-day response, visit our Chief Legal Officer Program page for our strategic solutions.