Pay Adjustment Definition

Term 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.
Extended Definition
Employers may make changes to employees’ pay rate 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 with 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 his or her services. Employers are expected to inform employees before the adjusted rate comes into effect.
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