I have an inside sales person who was compensated with a base plus incentive. He worked 45 hours per week and received the same base each week. He volunteered to reduce his hours by 30%. I told him I was going to reduce his base by 30% and he told me that it was not legal to do that. His response made no sense. Anyone else had a similar problem?

Anyone else had a similar problem?

Well, no, but let's say the person in question was non-exempt, getting $10 an hour. He is expected to work 45 hours a week and that comes to $10 x 40 plus $15 x 5, for a total of $475 per week. You cut the hours 30% and you only need pay $315.50. A thirty percent pay cut would pay the employee $332.50.

So, tell the employee he is correct and his pay will reflect what is legal and not what you would have paid.

The cost to him, in a year, is only $910.

This person is an inside sales person. He is paid a salary of 600 per week. The salary is based on workiing 45 hours perweek. He is being treated as an exempt employee. So I figured logically if his hours were reduced by some percent I could reduce his weekly base by the same percent.
Geroge

If he was being paid a salary to work 45 hours and no longer does, then you should be able to cut his pay. Essentially, he was being paid 13.33 per hour before. You could change his status to hourly from salaried and pay him at the same hourly rate.

Inside sales employees are NOT exempt from the minimum wage requirements under the FLSA ("salaried" is merely a pay method). Of course, you may lower his hourly rate of pay, as long as he has notice of it before he works the hours at the lower rate.

This person is an inside sales person. He is paid a salary of 600 per week. The salary is based on workiing 45 hours perweek. He is being treated as an exempt employee.

As Patty pointed out, inside sales folks aren't exempt.

In any event, with a 30% reduction in pay, the employee will fall below the threshold for salary of $455 a week to be exempt.

If you reduce the pay 30%, the employee will, as I pointed out earlier, get more per week than would be the case if you factored in overtime to derive the hourly earnings.

Your call. Either way you will be on legal grounds. Whether or not the employee accepts the cut in hours and pay or moves on is up to the employee.