The company I work for has just told us that we will all be getting pay decreases. Our wages are determined by our production(the more you do, the more you get)per hour. We were given brand new machines to do this work and were told not to worry about production for now, just to get used to the new machinery,and get faster on them. We were told that with this new program, our hourly wage could not decrease.This was in January. Our production has dropped considerably using these new machines. The majority of the people were doing 100-225% production and now that figure has dropped to about 40-60%. As of July, they are saying that a new pay program is now in effect, starting from...this past March! If we are at 50% of production, we will lose 25% of our pay. That is alot of money to us. Is this legal?

Going forward, yes it is. Retroactively, no it isn't. California law requires that prior notice be given of a decrease in your wages before the hours are worked at the lower rate.

However, I do have a question. Do you make a base hourly rate, then get incentive pay based on production? If so, is the incentive pay guaranteed? i.e., employees do XXX, we pay them $YYY.YY? How often is it calculated?

It would also have to meet the minimum wage requirement.

We are paid at an hourly rate.There is a base rate and then the the faster you do your work, the more money you get added to it. There is a cap to the hourly rate.We are supposed to be given reviews every 6 months.

OK, but here's my question. Does the hourly rate actually fluctuate from day-to-day or week-to-week, or does the hourly rate remain the same and the "production bonus" get added to your pay separately?

The hourly rate stays the same. At the time of your review, depending on your production from the previous months, you either get a raise if youve gone up in production from your previous review, or you get a decrease if youve gone below. You will get this new hourly rate until the next review. There is no separate pay for "production bonus".

Then I don't see any violation of law. As long as you are notified what the hourly rate is before you work the hours at that rate, which sounds like what is occurring.