Salary Reduction Letter
This Notice of Reduction of Salary is a letter explaining that you are reducing an employee’s pay when your business is facing challenging times.
5.0 (2 reviews)
Under 5 minutes
Suitable for Australia
Document Overview
The reduction of salary should always be authorised in writing by the employee and is principally for the employee’s benefit. A written record can help protect your business if any questions or legal issues arise regarding the pay reduction.
You can face up to $12,000 in fines if you do not have ethical reasons to do so. Therefore, it is recommended that you communicate with your employees before reducing their salaries in order to obtain their understanding and reach a mutual agreement.
Use this Notice of Reduction of Salary if:
- You would like to reduce an employee’s pay due to reasons other than their performance.
- You would like to concisely explain to the employee why the pay cut is necessary.
- You want to follow all the proper processes in reducing the employee’s pay
- You would like to have a record of the reduction of salary.
What does the Notice of Reduction of Salary cover?
- Explains the reasons why the pay cut is necessary.
- Informs the recipient when the pay cut will be implemented
- Sets out the new pay rate and the effective date
Other names for Notice of Reduction of Salary include:
- Notice of Pay Reduction
- Salary Reduction Letter
- Notice to Reduce Payment
- Notification of Pay Deduction
Further information:
- Reducing an Employee’s Pay: What You Need to Know (2019 Update)
- Avoiding the Pitfalls of Redundancy: Lessons for Employers
It's never been so easy
Sign-up to a free Lawpath account
Get started and we’ll take care of you. It’s that easy.
Collaborate with e-Sign and Sharing
Having access to your legal documents has never been easier. You can request e-signature, share the document and download for an efficient collaboration.
Create unlimited legal documents and eSignatures for only $39/month.
Upgrade to a Lawpath legal plan to boost your new business.
Here's what people say about Lawpath’s Salary Reduction Letter
Reviews are managed by BazaarVoice and comply with the BazaarVoice Authenticity Policy. Reviews are independently verified by BazaarVoice and detail our customers' real experiences.