Legal Question in Employment Law in Washington

Re: No demotion?

Yes, so long as pay does not fall below minimum wage. Also, if pay is cut by 25% or more, the employee may quit and apply for unemployment while searching for a new job. This may not necessarily be a smart thing to do, however.

I am assuming there is no collective bargaining agreement or other employment contract in place. (If so, the terms of these would control, but failure to abide by them would be a breach of contract, not a statutory violation.)

Few employers will intentionally boost pay and then trim it back, as this is really bad for morale. There is a strong possibility that the employer is trying to avoid or at least minimize layoffs.

No, its not fair, but in this economy, many unfair things are happening that have no immediate legal remedy. Hang in there until things improve, or until you can find another job. Good luck!