If you’re salaried and exempt, you’re not paid according to hours worked and typically must receive a predetermined salary each pay period. If you’re nonexempt and salaried, your salary is based on your work hours. In either case, if you didn’t perform according to company standards, your employer may be able to decrease your salary going forward. An exception applies if an employment contract forbids this practice, and if wage deductions are prohibited by state law.
Introduction
Your business is like a well-oiled machine. Each person has their own important and unique function, and your employees work together to form the best possible whole. But when one part of the machine breaks down it affects the entire operation. That’s why it’s important to take immediate action when an employee is failing to perform. If you notice that an employee is underperforming, it’s time to address the problem with an official letter of reprimand. And if there are repeated or severe instances of poor performance, you can always start a formal procedure for demoting or dismissing your employee. We explain in detail how to do this below
Your business is like a well-oiled machine. Each person has their own important and unique function, and your employees work together to form the best possible whole.
Your business is like a well-oiled machine. Each person has their own important and unique function, and your employees work together to form the best possible whole.
Your company is like a machine, with each part having its own distinct purpose and function in the whole structure. And when you have all of these parts working together in harmony, you get something that’s better than any single part alone could be: it can produce more efficiently; it will be more reliable; it will last longer; and above all else, it will be easier for someone else who wants to use this product or service because they don’t need to figure out how each part works individually before being able to use them for their intended purpose.
But when one part of the machine breaks down it affects the entire operation.
If one part of a machine breaks down, the whole machine stops working. Similarly, if an employee performs poorly and the team is affected as a result, it affects everyone’s performance.
That’s why it’s important to take immediate action when an employee is failing to perform.
When an employee is failing to perform, it’s important to take immediate action. It’s easy for managers to wait too long, either because they don’t want to hurt the employee or because they think a solution will magically appear. This can lead managers into making poor choices when dealing with a struggling employee, such as giving them more time or putting off a performance review. If you have an employee who is struggling and needs help improving their performance, you should start by talking to them about how they are performing and what needs improvement. Then create an improvement plan together where both parties agree on what steps need to be taken for the employee’s career development.
If you notice that an employee is underperforming, it’s time to address the problem with an official letter of reprimand.
A letter of reprimand is a formal document that outlines the reasons for an employee’s poor performance and explains how you expect them to improve. It should be written in a clear, concise manner so that there is no question about your expectations or what you consider appropriate behavior.
Include information about any incidents where you observed poor performance, as well as examples of their work that demonstrates this problem.
State clearly what steps you need the employee to take in order to improve their job performance and ensure they understand what needs improvement. In addition, indicate how long you expect it will take until they meet your expectations (for example: “I expect Mr. Smith will be able to complete 95% of his daily tasks within two weeks from today).
And if there are repeated or severe instances of poor performance, you can always start a formal procedure for demoting or dismissing your employee.
Dismissing an employee is a serious step. It’s not a decision to be taken lightly, and it requires careful thought and preparation. If you’re considering dismissing an employee for poor performance, or if you’ve already dismissed an employee for any reason, here are some things to keep in mind:
- Dismissing an employee can have serious legal consequences. Before deciding on whether or not to dismiss someone, be sure that their poor performance is persistent and severe enough that it warrants dismissal. There are laws in place that protect employees from being fired without cause (sometimes called wrongful termination), so don’t rush into any decisions until you’ve had time to consider all the factors involved with this process—including potential lawsuits related to firing someone who was performing poorly but wasn’t doing anything worthy of being fired over!
We explain in detail how to do this below.
Writing a Letter of Reprimand
Before you write your letter of reprimand, make sure that you have all the facts straight. Your employee should be able to answer some basic questions about their behavior and how it affects the company’s bottom line. If they can’t provide accurate answers, then it’s likely that they’re not being honest with themselves or their coworkers about how much time off sick they’ve taken or how many complaints were filed against them by customers and other employees.
If you decide that a letter of reprimand is appropriate for this situation, here are several key points to include:
- Why they are being reprimanded (i.e., poor performance)
- How it will affect them if things do not change
- What steps need to be taken in order for them not just meet expectations but exceed them as well (if applicable)
You need to address poor performance quickly, but be careful with your approach because improperly dismissing someone can lead to a lawsuit against your business.
You need to address poor performance quickly, but be careful with your approach because improperly dismissing someone can lead to a lawsuit against your business. For example, if an employee who is being dismissed for poor performance asks for their resignation letter, you should not sign one unless they are in the wrong and you have documented evidence of this. This will help you avoid any legal issues down the road.
If an employee isn’t meeting expectations and it’s affecting others on their team or other departments in the company (or if they’re just causing problems in general), talk about it with them privately first and document all meetings, conversations or written exchanges where possible so there’s no confusion about what was said/agreed upon at any point in time between either party involved during such situations like these ones here mentioned above before something gets out-of-hand later down the road from now onwards too soon tomorrow morning …
No Retroactive Wage Deductions
The starting point is to check local laws on what deductions are allowable. In Texas as in most states, for example, an employer may not make any deductions from wages they owe you unless you, the employee, authorizes them to do so in writing, reports the Texas Workforce Commission. In other words, an employer could not decrease your hourly rate for work you have already done and apply the pay cut retroactively.
Salary Reduction Going Forward
Just as your boss cannot impose a pay cut on you retroactively, at the same time, you cannot force your boss to continue paying you at your old rate in the future. This means that, in general, your boss can cut your pay. There are a few exceptions to this:
- The pay cut is discriminatory
- Your employment contract says otherwise
- The pay cut drops you below the minimum wage (see below).
In all other situations, you are free to negotiate with your boss. This means you have the right to accept the wage decrease and stay with the employer, or to decline the new rate and look for another job.
Minimum Wage Restrictions
If you’re salaried and nonexempt, your employer cannot decrease your salary to less than the federal or state minimum hourly wage, whichever is more. If you’re salaried and exempt, it cannot reduce your salary to less than $455 per week, reports Wimbush and Associates. If you’ve been switched to an hourly and nonexempt position, your employer doesn’t have to pay you the minimum salary of $455 per week anymore. At this point, you must be paid no less than the required minimum hourly wage.
To qualify for exempt status, you must perform specific duties according to federal or state law. Note that your employer can have you do both exempt and nonexempt work. In this case, your primary duty determines whether you’re exempt or nonexempt.
Employer Must Give Notice
Generally, an employer should not administer a pay cut unless you have received prior written warning of the both the pay cut and the problem that led to it. Ideally, your employer will keep proper records about the issue that caused the reduction, meaning your performance evaluation paperwork should expressly state why your salary has been decreased. This is good business practice, but an employer isn’t required to do it.
Maintaining accurate records helps the employer prove that the decrease is justified and the employer is not discriminating against you. If you disagree with your performance evaluation, follow company policy for appealing it. If you objectively believe that your discrimination rights were violated during the evaluation process, consult an attorney.
Conclusion
Reviewing employee performance is an important part of any business. If you notice that your employees are not doing their job properly, it’s critical that you address the issue. You can start by issuing a letter of reprimand, but if things don’t improve after several months, then it might be time for dismissal proceedings.
