About 50 of 158 employees at the Newfoundland and Labrador Centre for Health Information will see their annual pay shrink by an average of $7,600.
The Crown agency is developing an electronic medical records system and had set salaries under its own legislation.
Pay cuts for most workers range from less than $200 up to almost $22,000 as rates are aligned with government grids. The president and chief executive officer takes the biggest hit, losing about $50,000 on a projected salary this year of almost $200,000.
Health Minister Steve Kent said workers were given 18 months' notice about the changes, which take effect Sept. 30, 2016. The move is expected to save about $330,000, he said in an interview.
"We've been criticized for taking time to do this but we wanted to proceed in a way that didn't jeopardize the integrity of the centre.
"We didn't want to do anything that would result in a mass exodus of employees, for example."
Kent said the creation of a confidential, secure health data network continues along with efforts to connect every drug store to a provincewide pharmacy network. About 40 per cent are now linked, a vital step in tracking what police say is a prescription drug abuse problem across Newfoundland and Labrador.
Auditor general Terry Paddon reported in January 2013 that senior staff at the centre had received pay raises not seen elsewhere in government. For example, the vice-president of human resources and strategic planning at the time was paid $125,835 in 2012, an increase of 119 per cent from a salary of $57,406 in 2008.
Paddon noted that pay hikes were expected as the centre took on more staff and responsibilities.
The centre said legislation allowed it to hire and set pay rates in keeping with "industry best practices."
Aligning salaries with government rates is not bad news for all staff. About half of them will get raises.
Ray Dillon, who serves voluntarily as the centre's board chairman, said he expects most staff will stay despite the salary cuts.
Follow @suebailey on Twitter.