When an employer reduces an employee’s hours, the resulting loss of income causes stress and uncertainty. The ability of a company to alter a work schedule is generally supported by United States labor law. Whether a job can cut your hours depends on the specific legal relationship you have with your employer and whether the reduction violates anti-discrimination or wage laws. Understanding the foundational concepts of employment and the exceptions to those rules is the first step in knowing your rights.
The Foundation of At-Will Employment
Most private-sector employment in the United States operates under the legal doctrine of “at-will” employment. This is the primary reason an employer can unilaterally change the terms of a job, including the number of hours worked. This principle dictates that an employer can terminate an employee for any reason, provided that reason is not specifically illegal. The at-will relationship also grants the employee the reciprocal right to leave a job at any time.
Under this concept, an employer can alter the terms of employment, such as reducing pay or limiting the work schedule, often without giving advance notice. Since no set number of hours per week is guaranteed, the employer is free to modify schedules to meet changing business needs, such as a slowdown in work or restructuring. This flexibility applies unless an employment contract specifies otherwise.
While the at-will doctrine grants broad flexibility, employers must still adhere to federal and state wage laws. This includes ensuring all hours worked are paid and that the rate remains above the minimum wage. For large-scale reductions affecting a significant portion of the workforce, the federal Worker Adjustment and Retraining Notification (WARN) Act may require 60 days’ notice. This act applies only when hours are reduced by 50% or more for at least six months at companies with 100 or more employees.
When Reducing Hours is Illegal
Federal and state laws prohibit employers from reducing hours for specific, unlawful reasons, even within the scope of at-will employment. A reduction in hours is illegal if it is motivated by discrimination or retaliation, or if it violates an existing employment agreement. The focus in these cases is on the improper motivation behind the employer’s decision, not simply the act of cutting hours.
Discrimination Based on Protected Class
Reducing an employee’s schedule is illegal if the action is based on that individual’s membership in a protected class, as defined by laws like Title VII of the Civil Rights Act. Protected characteristics include race, color, religion, sex, national origin, age (for workers 40 and over), and disability status.
A discriminatory reduction occurs when an employee is targeted for a cut in hours while similarly situated employees outside the protected class are not affected. For instance, if a company cuts costs by only reducing the schedules of older employees, this may violate the ADEA. The illegal element is the motivation to treat one group differently due to a protected characteristic.
Retaliation Against Protected Activity
Hours cannot be cut in retaliation against an employee who has engaged in legally protected activity. This includes filing a complaint about discrimination, reporting workplace safety violations, or whistleblowing about illegal company conduct. An employer also cannot reduce hours as punishment for taking protected leave, such as medical leave under the Family and Medical Leave Act (FMLA).
Retaliation is established if the employee can demonstrate that the hour cut was a direct result of the protected action. This protection ensures employees can exercise their rights without fear of negative consequences. Proving a retaliatory motive often requires establishing a close timing between the protected activity and the reduction in hours.
Breach of Employment Contract
The at-will presumption is overridden when an employee is covered by a valid employment contract or a collective bargaining agreement (CBA). These agreements can specify a guaranteed minimum number of work hours or a fixed term of employment. Cutting an employee’s hours in violation of these terms constitutes a breach of contract.
Unionized workers are protected by a CBA, which governs pay rates, hours, and conditions of work. If a company wishes to reduce hours for employees covered by a CBA, it must generally renegotiate those terms with union representatives. Any contract that guarantees a work schedule provides an exception to the employer’s general right to modify terms at will.
Effects on Wages and Employee Classification
A reduction in work hours impacts employees differently depending on their classification as either non-exempt (hourly) or exempt (salaried). Non-exempt employees are paid for every hour worked and are entitled to overtime pay for hours over 40 in a workweek. A cut in hours for these employees results in a direct reduction in their gross wages.
Exempt employees are paid a predetermined, fixed salary that is not subject to reduction based on the quantity of work performed, known as the “salary basis” test. If a salaried employee’s hours are cut, their weekly salary generally cannot be docked for day-to-day variations in workload. Impermissible deductions, such as reducing pay because work was not available, violate the salary basis test and can cause the employee to lose their exempt status.
If an exempt employee loses their status due to improper deductions, the employer could become liable for overtime pay for any hours worked over 40 in previous weeks. Employers can make a permanent, prospective reduction to a salaried employee’s annual salary to reflect a long-term business need. This change must be bona fide and the new salary must still meet the federal minimum salary threshold for exemption.
Financial and Benefit Consequences
A reduction in hours can have significant consequences for an employee’s access to health insurance and eligibility for unemployment benefits. Health insurance eligibility is often tied to the number of hours worked, particularly under the Affordable Care Act (ACA). The ACA defines a full-time employee as one who works an average of 30 or more hours per week.
Applicable Large Employers (ALEs), companies with 50 or more full-time equivalent employees, must offer affordable coverage to their full-time staff. If an employee’s hours drop below the 30-hour threshold, they may lose eligibility for employer-provided health coverage. The determination often depends on the employer’s chosen measurement method for tracking hours.
A reduction in hours may also trigger eligibility for partial unemployment benefits, which provide temporary income replacement for workers experiencing a loss of wages. Most states allow employees whose hours and earnings have been significantly cut to file a claim, even if they are not fully unemployed. The partial benefit amount is calculated based on the difference between the employee’s prior earnings and their current reduced earnings.
Eligibility rules vary by state but typically require the employee to be ready and available for work. Some states offer “SharedWork” or “work-sharing” programs where the employer applies to reduce the hours of a group of employees. These employees can then receive partial unemployment benefits without an individual job search requirement. Workers who experience a substantial cut in hours should immediately investigate their state’s rules for partial unemployment.
Employee Recourse and Next Steps
When hours are reduced, employees should first document the change, noting the date they were informed, the reason given, and the new schedule. A primary step involves seeking clarification from the employer or Human Resources department regarding the specific reason for the cut. Understanding the stated motivation helps determine whether the reduction is a lawful business decision or a potentially illegal action.
Employees can attempt to negotiate with the employer, especially if the reduction is based on temporary business conditions or high performance history. If the hour cut makes the employee eligible for partial unemployment, they should file a claim with their state’s unemployment agency immediately, as benefits are not retroactive. The application requires details about the prior and current work situation, including the reason for the reduced hours.
If the employee suspects the hour cut is based on illegal discrimination, retaliation, or a breach of contract, consulting with a labor or employment attorney is the appropriate next step. An attorney can evaluate the situation and advise on filing a formal complaint with the Equal Employment Opportunity Commission (EEOC) or a state labor agency. Since legal claims often have strict time limits, prompt consultation is necessary to preserve the employee’s rights.