My employer is in Oregon. They are considering, as part of a disciplinary action, demoting an exempt level manager for non-performance of his operational division, and placing him into a different position. There is documentation about the issues at hand. The demotion would include an incremental pay cut, since the position would have less responsibility over a smaller operational area of the company, but more within his expertise. I've read an exempt level person's pay cannot be reduced as part of a disciplinary action, however, since the scope of responsibility would be changing, and the company still feels the employee can make a valuable contribution to the organization, the pay cut would be due to the position change, not the discipline.