Pay Cut - Do you See Red Flags?

ctmumm · November 2004

Management is considering a pay cut of 30% for one our highest paid employees. (We have already experienced layoffs). My concern is that there are two employees at this level of pay, yet only one of them is being considered for a pay cut. There has been no mention of changing the job desc. No other EEs are being considered for a paycut. There is also a gender difference and a significate age difference between the two. The EE being considered for the cut is female over 50. Are there legal problems here?

Whatever · November 2004

Yes,Yes, Yes. I won't explain because it appears you already knew the answer the question.

nohr4u1yr · November 2004

No only do I see red flags...I see more people being laid off to be able to pay for the settlement she will win...

lhill · November 2004

I think she will go straight to EEOC and file at least one discrimination claim, maybe more.

Crout · November 2004

It's only illegal if she was given the pay cut BECAUSE she's a woman over 50. If she has some serious performance issues you'll be okay PROVIDED you can supply adequate documentation that she was aware of the issues and was given a fair chance to bring her performance up to par. If nothing is documented, then you may have real problems if the EEOC comes knocking on your door.

ctmumm · November 2004

There are no performance issues - the pay cut is for "economic reasons"

Rockie · November 2004

Whoever made this decision is barking up the wrong tree if they are trying to save money. The fair thing to do would be to give an equal pay cut to each of these positions.

The first question asked would be: Why did you choose the woman for the pay cut and leave the male's pay intact?

Your company will be paying a lot of legal fees.

LindaE · November 2004

Heck yeah, everyone's right. What the co. saves in overhead, they will pay in legal fees tenfold!

Crout · November 2004

Wow. If the so-called "economic reasons" apply only to the woman over 50 you'll never be able to prove the action wasn't taken because of her age and/or gender. You're really setting yourselves up for some big problems, but maybe that's what your boss needs to bring him/her into current HR practices.

dchr9203 · November 2004

Unless you have a legitimate, extremely well documented performance issue that warrants the change in pay for the "protected" employee, GET OUT YOUR CHECKBOOK! Even if you do have a legitimate, extremely well documented performance issue that warrants the change, you may want to have that checkbook ready just in case as she'll most likely file an EEOC claim anyway, and you'll have to spend manhours and consult your attorney to respond.

mwild31 · November 2004

Yep - there are red flags. The main issue is age, but gender can definitely come into play as well. Your issue is how to overcome what appears from the post to be an arbitrary decision between two similarly situated employees (if they are similarly situated). "Economic reasons" begs the question, if the company is facing such financial hardship, why was only the older person targeted for the pay cut? I would definitely talk to your attorney with how best to proceed, before taking any definitive action. I'm including a link as well that might be helpful:
[url]http://www.eeoc.gov/policy/docs/compensation.html[/url]

Pay Cut - Do you See Red Flags?

Comments