Employer cutting my salary by 25%

[starrynite]

I'm a General Manager at a bowling center on salary (Amusement & Recreation Industry) and the owner told me yesterday that he is cutting my pay by 25% effective immediately. Can he do that - is that legal? Does he have to wait until the next pay period begins? Also, my hours will be increasing from 40 to 50 plus. Am I eligible for overtime pay?

Thanks for any help......

 

[army judge]

I'm a General Manager at a bowling center on salary (Amusement & Recreation Industry) and the owner told me yesterday that he is cutting my pay by 25% effective immediately. Can he do that - is that legal? Does he have to wait until the next pay period begins? Also, my hours will be increasing from 40 to 50 plus. Am I eligible for overtime pay?

Thanks for any help......

You're salaried, therefore, a 50 hour work week isn't unreasonable or illegal.

Salaried employees do not receive overtime pay by law.

Your employer can do anything, along the lines of pay cuts, except pay you below the minimum wage settings, or cut your pay retroactively.

A 25% pay cut going forward is legal.

It isn't smart, but it isn't illegal.

When things like this happen, it means the business is in financial trouble, or your employer is planning to sack you; once they have hired your replacement.

Nothing to see hera, nothing to sue about here, move along, move along.

You can always secure new employment elsewhere, or become an entrepreneur.

 

[Patricia_Young]

Is the new salary at least $640/week?

More accurately said, exempt employees (most of them) are not legally entitled to overtime pay; "salaried" and "hourly" are merely pay methods.

The only thing California law requires is that a decrease cannot be retroactive. Other than that, the employer could tell you as you walked in the door, that your rate is now $$$.

 

[starrynite]

Patricia,
Thank you for your speedy reply! No, the new salary is below $640/week. What does that mean??

 

[army judge]

Patricia,
Thank you for your speedy reply! No, the new salary is below $640/week. What does that mean??

She's probably referring to the executive exemption test.
She might be on to something that will benefit you!
You might now be entitled to overtime, even though they give you the title of manager.
CA has a pretty tough standard about paying overtime.

In order to be exempt from overtime pay under the Executive Exemption, you must be an bona-fide "executive." In order to be considered an "executive" you must be paid a salary of at least $640/week and:

1. Manage the entire enterprise in which you work or a customarily recognized department or subdivision.
2. Direct the work of at least 2 subordinates in your department.
3. Have authority to hire or fire – directly or indirectly.
4. Exercise independent business judgment.
5. Spend more than 50% of your time doing the above.

The executive exemption is sometimes incorrectly called the "supervisors" exemption. It is important to know that there is no "supervisors" exemption. You can supervise people and still be entitled to overtime.

Many people see requirement #2 and think that if you supervise 2 people, you are exempt. This is simply not the case. First of all, if you only supervised 2 people, it is extremely unlikely that you would spend 50% of your time supervising them. More than likely, you will be considered a "working foreman" and would be entitled to overtime.

In addition, the most important item above is that you must be an executive in charge of a real department or subdivision of the enterprise. Jobs such as "Team Lead", "Development Manager", and "Project Manager" are likely not in charge of a fixed department. The DLSE enforcement manually aptly puts the challenge of this exemption in that an "employee must be in charge of the unit, not simply participate in the management of the unit." This is why most low and mid level managers are improperly classified under this exemption. If you were told you were not entitled to overtime because you are a "manager," you can email me with a brief description of your job duties and I can tell you whether or not this exemption might apply to you.

To meet requirement #3, you must be able to do the following: hire or fire, AND review performance. You do not need to be the one that actually performs the hiring or firing, but your opinion must be given strong preference. If a voting system is used, and you only get one vote like everyone else, then your opinion is not being given strong preference and you don't meet the exemption. You do not need to both hire and fire, participating in either one will be sufficient. However, you must take part in performance reviews or other activities which relate to the advancement of employees.

Remember that job titles are not used in determining exemption from overtime. Just because you company prints "Director of XXX" or "Vice President of YYY" on you business card does not make you exempt. If you spend 50% of your time doing the same type of work as your subbordinates, it doesn't matter what your title is, you are probably entiteled to overtime.

http://www.gotovertime.com/law.html

 

[starrynite]

Thanks, Mr. Army Judge.... you had 2 speedy replies!! That was a lot to digest and understand, but you're right, that does seem to help. My boss is cutting pay AND increasing my hours, so overtime would certainly be helpful. I appreciate the insight.

 

[army judge]

Thanks, Mr. Army Judge.... you had 2 speedy replies!! That was a lot to digest and understand, but you're right, that does seem to help. My boss is cutting pay AND increasing my hours, so overtime would certainly be helpful. I appreciate the insight.

Now, you have to approach this in a solicitous manner.

You must not be demanding or angry.

You have be inquisitive and ask it somewhat like this: "Okay, Mr. Gotbucks, I understand why you're doing this. But, now that pay is below $640/week, the state says I have to be paid for every hour worked in excess of 40 each week. The state says that the overtime is to be paid at time and half. How do you want me to document it?"

You can create your own dialogue, but be very nice and subordinate.

If not, Mr. Bigbucks might try to replace you with someone less informed and more compliant.