Is it legal for my CEO to decrease pay with out verbal or written warning?

Is it legal for my CEO to decrease pay with out verbal or written warning?

On Monday, March 7, 2011 my CEO held a conference meeting with the employees. In the meeting he stated that he may need to decrease every ones pay by up to 35%. He also stated that it may be for as long as the next three months. He then said that he is hoping that he will not have to do this but that it may come down to it. On Tuesday, March 8, 2011 a fellow co-worker said that he had a chance to talk to the CEO and that the CEO told him that if he had to decrease every ones pay that it would begin at the start of this pay period (March 1, 2011). I am under the impression that I am still owed my original salary until I am notified in writing of a decrease.

So I need to know if it is legal for him to decrease salary in this retro-active way?
Is is legal for him to decrease salary with out any written or even a direct verbal notice?
What action do I need to take if this actually happens?
Should I take action now or wait until I receive my next pay stub and see a decrease?