It's not illegal to ask you to take less money. If they just do it without your consent it certainly would be. It's not illegal, but it is crappy to do. "Allowing you to work more hours" is not a thing if you aren't being paid for those hours. What hourly employee would think working an extra 8 hours per week for free was a net positive in their week?

Edit: On a related note...they're within their rights to fire you for whatever they want though so that also sucks.