Pay Adjustment Definition

Pay adjustment is any change that the employer makes to an employee’s pay rate. This change can be an increase or a decrease.

Pay Adjustment Extended Definition
Employers may make changes to employees’ pay rates resulting from different reasons. This will influence the basic pay the employees take home. The rate of pay can be increased or decreased.

The reduction cannot lower the payroll wages below the applicable state or federal minimum wage. The adjustment may or may not be accompanied by a change in duties or position. Some instances of pay adjustment are when the business is trying to cut its costs or when it is increasing the pay of an employee to better compensate for their services. Employers are expected to inform employees before the adjusted rate comes into effect.

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Last Updated By

Rachel Blakely-Gray | Apr 28, 2023