Because of slowing business my employer has decided to work all employees only 4 days a week. Is it legal for them to cut our salaries by 1/5th ? We all work 50 to 60 hours a week with no overtime.

The devil is in the details.

Salaried, exempt employees don't work on an hourly basis. They can, if legitimately classified as salaried exempt, work 168 hours a week in all but two states (and even in those two, in some cases) without extra pay.

Cutting the pay of such employees is legal, but if the salary drops below $455 a week (more in a few states), the exempt status is lost.

Agreed. Two points however.
- Salaried is just a payment basis which really does not mean much by itself. Both Non-Exempt and Exempt employees can be paid on a Salaried basis, but only Exempt employees are not paid overtime.
- Not everyone who is classified as Exempt by their employers are legally Exempt. Just a thought, but now might be a good time to review your Exempt status.
http://www.dol.gov/esa/whd/regs/compliance/fairpay/main.htm