Job Change Led to a 50% Pay Cut: Was This Salary Reduction Legal?

I changed my job role and company in 2002. My salary was reduced significantly, and the basic salary was decreased by almost 50 percent. I wanted the job because it was in an area I liked. Additionally, I had left my existing job before securing a new one and was out of work for 6 months.

Was the salary reduction legal?

Can you explain if the salary reduction was legal? This reduction continued later, and a few increments were not given to me.

Individual Discretion in Job Changes

Leaving an existing job for any reason is an individual's discretion. Similarly, after some gap, accepting a job in a place of their liking is the individual's choice.

Therefore, such a choice should be exercised only after verifying matters like the new organization's profile, future prospects such as promotional avenues, initial compensation package, increments, fringe benefits, etc. How can the poster complain about a reduced salary compared to their previous job after accepting the offer and joining? Does he mean to convey that nothing was offered, or that the actual salary is less than the offer?

Appreciate your quick and positive response. Let me address your queries directly:

1) The compensation package would have been conveyed to you in the offer letter, possibly in CTC format. After accepting the offer and assuming the position, you cannot object to any changes in the salary structure compared to your previous job's pay structure.

2) Basic pay is the most crucial component in a salary structure, as all other indirect monetary benefits are typically calculated based on the basic pay. For instance, in the event of employment termination, terminal benefits such as gratuity may vary depending on the last drawn basic pay.

3) Nowadays, most employers determine employee compensation using the CTC method, which can be confusing for job seekers and requires both insight and foresight to interpret.

Let me know if you need any further clarification or assistance.

Dear disturbed colleague,

Generally, people change jobs, inter alia, for better compensation and benefits. Just as offering a lower salary or basic pay than previously earned by any organization is in bad taste (legality is debatable), similarly, your complaining about it after knowing it fully well and accepting it before joining reflects fault on your part as well. I share the views expressed by Mr. Umakanthan.

I think your generalized observations about seniors not knowing anything and following an old-fashioned style of managing are uncalled for in this context.

Regards,
Vinayak Nagarkar
HR and Employee Relations Consultant