Can My Employer Reduce My Wages In Ontario?

In Ontario, your employer generally can’t force you to accept a major reduction in your wages, salary, commission, bonus, or total compensation without your agreement.

A pay cut is a serious change to your job. If your employer reduces your income without consent, you may have been constructively dismissed in Ontario and could be owed compensation.

This page is for non-unionized employees in Ontario. If you are unionized, your union must assist you through the collective agreement process.

The Short Answer For Ontario Employees

Your employer can ask you to accept a wage reduction, but you don’t automatically have to agree.

Your pay is one of the most important terms of your employment. If your employer makes a significant change to your compensation without your approval, the law may treat it as a termination of employment.

💡 That means you may be able to pursue severance pay in Ontario instead of working under the lower wage.

When A Wage Reduction Becomes A Legal Problem

A wage reduction can become a legal issue when it is significant, unexpected, or imposed without your consent.

This can include changes to:

Your hourly wage.
Your annual salary.
Your commission structure.
Your bonus plan.
Your regular hours of work.
Your benefits, allowance, or other compensation.

⚠️ There is no single percentage that automatically proves constructive dismissal. A small change may not be enough, but a larger reduction to your income should be reviewed by an Ontario employment lawyer.

Ontario Examples Of Improper Pay Cuts

You should get legal advice if your employer:

Cuts your salary because business is slow.
Reduces your hourly rate after you already worked those hours.
Changes your commission formula so you earn less.
Removes a guaranteed bonus or car allowance.
Cuts your shifts but expects the same workload.
Moves you into a lower-paying role.
Says the cut is temporary but gives no clear end date.

Even if the pay cut applies to many employees, that doesn’t mean your employer can ignore your individual rights.

Your Employer Can’t Reduce Your Wages During Working Notice

Ontario has specific rules when an employer gives an employee working notice of termination.

During the statutory notice period, your employer can’t reduce your wage rate or make negative changes to your employment terms. They must also continue your regular wages and benefits during that period.

If your employer cuts your wages after giving you notice of termination, or changes your job during the notice period, you should speak with an employment lawyer right away.

➡️ Learn more about termination without cause in Ontario and wrongful dismissal in Ontario.

Do Not Accidentally Accept A Wage Reduction

If your employer reduces your wages and you keep working without objecting, they may argue that you accepted the change.

That doesn’t mean you should quit right away. Resigning too quickly can also create problems for your claim.

The safest step is to clearly object in writing and get legal advice before signing anything, accepting the lower wage, or resigning.

What To Do If Your Employer Cuts Your Pay

If your employer reduces your wages in Ontario, take these steps:

Ask for the wage reduction in writing.
Save your employment contract, pay stubs, commission plan, bonus documents, and emails.
Do not sign a new contract or pay agreement before getting advice.
Do not resign before understanding your options.
Put your objection in writing if you don’t accept the change.
Contact an Ontario employment lawyer as soon as possible.

How Much Could You Be Owed After A Pay Cut?

If the wage reduction is constructive dismissal, you may be owed a full severance package – up to 24 months’ pay.

Severance can include more than basic pay. It can include salary, benefits, commissions, bonuses, pension contributions, car allowance, and other compensation you would have earned during the proper notice period.

📲 Many non-unionized employees in Ontario are owed more than the minimum amounts set out in employment standards legislation. Use the Severance Pay Calculator to estimate what you may be owed.

Has Your Employer Reduced Your Wages In Ontario?

A pay cut can be more than a workplace change. If your employer reduced your salary, hourly wage, commission, bonus, or hours without your agreement, you may have a constructive dismissal claim and be owed compensation.

Before you accept the change or resign, speak with an Ontario employment lawyer at Samfiru Tumarkin LLP.

Contact us today or call 1-855-821-5900.

Can My Employer Reduce My Wages Ontario FAQs

Can my employer reduce my wages in Ontario?

Your employer generally can’t force a major wage reduction on you without your agreement. If the pay cut is significant, it may be constructive dismissal.

Can my employer lower my salary but keep my job the same?

A major salary cut with no real change to your duties can still be constructive dismissal. Your employer can’t avoid severance simply by keeping you employed at a lower rate of pay.

Can my employer reduce my hours instead of my wage?

A significant reduction in hours can also be a major change to your employment, especially if it causes a large drop in income. This should be reviewed before you accept it.

Can my employer reduce my commission in Ontario?

A major commission change can be treated like a wage reduction if it lowers your expected income. Commission plans should be reviewed carefully before you agree to a new structure.

Can my employer reduce my wages during a notice period?

No. During the statutory notice period, your employer can’t reduce your wage rate or make negative changes to your employment terms.

Should I quit if my employer cuts my pay?

No. Do not resign before getting legal advice. You should understand whether the pay cut is constructive dismissal and how to protect your severance claim.

Can my employer fire me if I refuse a wage reduction?

Your employer may choose to end your employment, but they must provide proper compensation. If you are fired after refusing a pay cut, you may be owed severance pay.