Ask HR: Lowering an Employee’s Pay- Is that legal?

Dear HR,

My employee has been here about 60 days now and I can honestly say that his skill set is not much higher than the day we hired him. We really like him, his attendance is good, he is punctual, he seems to like working here, but I cannot justify his pay rate. He is very slow and has very low learning curve even on basic tasks for our industry. His foreman is really frustrated and has transferred him over to my crew to further assess what we are missing in his learning curve. Since he was hired, we did bring another employee on board; and now all of my current staff are working circles around him—picking up after him, fixing his mistakes. We had a verbal sit-down with him about 30 days ago, and another yesterday, which will result in a written correction and a request to lower his pay rate.

I have never lowered an employee’s pay rate before and don’t know if that is okay. I just cannot call him any type of “skilled” worker no matter who I put him with—he is just a very slow learner and worker. Can I lower his pay rate legally? Please advise me on how to handle this!


HR Answer:

Yes, it is legal to decrease an employee’s pay based upon skill set and performance, but not retroactively. A “Best Practice” is to put this change in writing so there is no misinterpretation by the employee as to the effective date this change occurs.

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