Can Companies Cut Salary When I Move to a New Location?

by Evil HR Lady on March 31, 2015

To keep things short and simple, I work at a corporate business. When I first started working, my hourly wage was X, then I transferred stores (and regions) and my hourly wage was lowered to Y due to “cost of living and change of work status”. By meaning of work status, they said I was “fired” and “rehired” to accommodate the status. With that, my pay was dropped from X to Y even though through the company my hire date has NOT changed. This occurred 4.5 years ago. I’ve missed out on my actual wage pay (the math puts it at roughly $6,000). Can I do anything about this?

Yes. You can look for a new job at a higher salary, take it and leave.

Let’s go through this though. Can they lower your salary? Absolutely. As long as they tell you beforehand (and in some states, in writing). You then have the opportunity to reject that decrease by quitting your job.

Now, let’s talk about the practicality of this policy and the real impact on your life. First, let’s talk money. You said you’ve missed out on $6000 pay over 4.5 years. I’m assuming that means a total of $6000, not $6000 per year. So, let’s do that math:

52 weeks per year x 4.5 years=234 weeks

40 hours per week x 234 weeks=9360 hours

$6000/9360 hours=$0.64 per hour.

Now, as you’ve said, that adds up. I’m never going to turn down an extra $6k over a 4.5 year period for doing the same work. But, a $0.64 per hour wage decrease is a lot less shocking than a $6000 pay cut.

Why do this? Well, they told you. It’s a location thing. Now,  many years ago, I worked in HR for the best grocery store in the entire world. Even the best grocery store in the world paid different amounts in different areas. The cost of living and the market rates just vary from geographic region to geographic region. I can’t remember if we ever cut pay when people transferred stores, but it wouldn’t surprise me. (When I worked there, though, they were opening new stores rapidly in higher cost of living areas so most of the transfers resulted in higher pay.)

If you don’t keep consistency within your store, you can run into problems. “Why is Bob making $0.64 per hour more than the rest of us?” Also, theoretically, if you searched for a new job you would find one at the lower, regional rate.

Money is very geographically dependent. You’d expect to make more in a job in NYC than for a job in upstate NY. Which brings me to a story. I was living in Rochester, NY, and looking for a job. I was straight out of school, so looking for something entry level. I posted my resume on Monster and put in my salary requirements at something like $35,000. Within a very short time, I got a phone call from a company who were very interested in me. Yeah! They were located in Manhattan. He said, “You’re okay with $35k?” to which I said, “In Rochester, yes. In Manhattan, no. It’s more expensive there.” He was geographically challenged and said, “Couldn’t you just commute?” I had to explain to him that Rochester was almost 350  miles from Manhattan and so, sadly it would not work out. He was so eager to bring me on because there was no one in Manhattan willing to do that job for that pay. In Rochester? Lots of people would have applied. (And on a side note, I ended up with a job in Rochester at $40k. Win for me!)

So, different pay, different regions makes sense. Now, of course, any time you get a pay cut it can feel like a slap in the face. But, it’s not meant to be one in a case like this.

I do question their logic of “terminating” you and then “rehiring” you in a different store, but that may just be company lingo or how their HR system does stuff. You “terminate” in Store A before the system will free you up to be transferred to store B. It’s not a big deal, since, as you said your hire date remained the same. HR people should realize that using terms like “terminate” can cause people to feel like they’ve been fired.

But, you’ve been doing this for 4.5 years, so why the question now? I suspect because it’s time for you to move on. You’re decreasingly dissatisfied with your pay and I suspect you’re dissatisfied with your job, in general. Instead of looking for things that are wrong with the current company, look for a new job. 4.5 years is plenty of time to be with any one company–and you’ve been there longer. So, start looking! Maybe you’ll find something at higher pay. Maybe you won’t. Maybe you don’t want to change companies, so maybe it’s time for a new department and new responsibilities.

Don’t let something that caused by a policy 4.5 years ago make you miserable today. If you want to stay where you are, own it. Your choice. If you don’t, move on. Good luck.

{ 9 comments… read them below or add one }

Nedra March 31, 2015 at 3:44 pm

Reading your blog is an integral part of my workday morning. I have learned much from your writing and look forward to future installments.

And hey, I didn’t know you worked in Rochester – you are right, Wegmans IS the best grocery store in the world!!

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Evil HR Lady March 31, 2015 at 3:57 pm

It really is. When we go back to Rochester to visit, we say it’s to see grandma, but really, it’s to go to Wegmans.

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NorthernHR March 31, 2015 at 5:02 pm

That’s a lot (well something little) to fester over for 4.5 years. We are all responsible for how we act/react to a situation & it sounds like this person has chosen to be miserable over for the past few years. I agree that it would have caused upset with current employees from the new location if the person was brought in at a higher wage simply for the fact that they used to live somewhere else.

Some ‘franchise’ businesses are ‘locally’ owned and operated, and therefore have individual payroll systems. The company I work for is like this. An employee from here could move a thousand miles away, get a job with the same company, and even have experience and seniority play to their advantage. They could even directly transfer their benefits, RSP’s, etc. (paperwork on my end & the other location’s end) and waive any probationary period (not saying this IS a good idea). But the wage wouldn’t necessarily be transferable. It would be negotiable between the employee and the Manager/HR of that particular location. And I would have to terminate the person in my payroll system, provide ROE, etc., and the hiring process would have to be started as usual at the new location.

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Evil HR Lady March 31, 2015 at 6:11 pm

Good point! And though it may be seamless to the employee, in the background there is a lot of stuff going on.

HR should really explain thoroughly what they mean.

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Anonymous March 31, 2015 at 7:30 pm

I wonder if OP knew the salary change before they made all arrangements to move. Was this thrown at OP with all her stuff packed up and a new lease signed? Or was this known prior to making arrangements to relocate?

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NorthernHR March 31, 2015 at 5:06 pm

Also (after thought), I would be interested to know if the new location helped with moving expenses. If they did, this is a huge benefit to the employee. I am wondering if any cost was taken into consideration against that $6000.00.

And if there was no help with moving costs, I am hoping that I didn’t open up a new can of worms:)

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the gold digger March 31, 2015 at 5:46 pm

If the transfer was at the employer’s request, then they better have paid the moving expenses!

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Evil HR Lady March 31, 2015 at 6:12 pm

Agreed that they should have paid relo costs if it was at their request.

I kind of get the feeling, though, that he didn’t physically move. Just changed stores. And the new store happened to be in a different district with different pay scales.

I can see that happening pretty easily.

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Andre August 10, 2017 at 3:17 am

Im kind of in the same boat. I work for a big company and transferred to a new location which i took about a $1.50 decrease in pay. Was told its a different market. Fast foward two years later and my old market and new market have become 1 market. I looked into transferring back and was told i wouldnt get back what was taken because the company sees the two areas as the same market levels. Bottom line im out a little over $2.00/hr because i moved 2 years too early. Managers say its messed up but nothing they can do.

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