Can My Employer Legally Cut My Pay in Ontario?
Your employer is generally required to honour the terms of your employment, especially when it comes to your pay. If you were promised a certain wage at hiring and didn’t agree to any changes, a reduction in pay could violate your rights under Ontario law.
This article explains what happens when an employer tries to reduce your pay, what the law says, and how you may be able to respond.
Does My Employer Have to Pay Me What They Promised?
Yes. If your employer offered you a specific wage when you were hired, they are generally required to follow through, whether the offer was in writing, verbal, or implied through your job posting or offer letter. A reduction in pay without your agreement could amount to a breach of your employment contract.
If you didn’t agree to a new rate of pay, and your employer goes ahead with a pay cut anyway, you may have legal options.
What Is an Employment Contract?
An employment contract is the foundation of your working relationship. It may be:
- Written: like a formal offer letter or signed agreement
- Verbal: a promise made during the hiring process
- Implied: based on standard practices or representations
Even if you don’t have a written contract, the Employment Standards Act, 2000 (ESA) sets out minimum standards, including those around pay. If your employer violates those standards or changes key terms without your consent, you may be entitled to remedies.
Can I Agree to a Pay Cut?
Yes. You can agree to a pay cut, but it must be clear and voluntary. Under the ESA:
- Any deductions must be authorized in writing
- Pay cuts cannot be made to cover poor performance, damaged equipment, or mistakes (e.g., cash register shortages) unless you are the only one with access and you signed an agreement
Even if you keep working after a pay cut, your employer may argue that you accepted the new terms. That’s why it’s important to speak to an employment lawyer before continuing under the new pay arrangement.
What If I Don’t Agree?
If you refuse a pay cut and your employer imposes it anyway, this may be considered a unilateral change to a fundamental term of your contract. That could amount to constructive dismissal—meaning you could resign and still be entitled to severance or notice pay.
Do not resign without getting legal advice. Whether a constructive dismissal claim succeeds depends on several factors, including how significant the change is and how you responded.
What Are My Legal Options?
If your employer cut your pay without your agreement, here are possible next steps:
- Consult an Employment Lawyer: Get clarity on whether your rights were violated.
- Demand Letter: A lawyer can write a letter requesting reinstatement of your original pay.
- Constructive Dismissal Claim: If the situation qualifies, you may be able to resign and seek compensation.
- Complaint or Legal Action: You may file a claim with the Ministry of Labour or pursue legal action, depending on the facts of your case.
Final Thoughts
Your rate of pay affects every part of your life. If your employer reduces it without your consent, you may be entitled to legal remedies. The sooner you act, the more options you may have.
Contact Achkar Law
If you’ve experienced a pay cut without your consent or believe your employer has changed the terms of your employment, Achkar Law can help.
Contact us by phone toll-free at 1-800-771-7882 or email us at [email protected].