Help Wanted: Paying a rehired employee a higher wage
Carrie Mason-DraffenCarrie Mason-Draffen
Mason-Draffen, a business reporter, writes a column about workplace issues.
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DEAR CARRIE: I work for a company that lists all employees as exempt. We work a standard 40-hour week and do not get paid overtime no matter how many extra hours we work. While we don't get overtime, we are docked if we have to leave a few hours early for an appointment. When I challenged this, I was told it is written in the company handbook. Is there a law regarding this issue? -- No O.T. Pay
DEAR NO O.T.: It's rare for an office to have all exempt employees; so that raises a red flag. The other hoisted red flag is that your company treats you and your colleagues as exempt and nonexempt employees at the same time. Labor law requires that you be one or the other.
If you are truly exempt -- that is, exempt from overtime and minimum wage -- your pay can't be docked when you miss less than a full day. Your paid time off can be docked, but not your pay. If the company docks your pay in that instance, it defeats the exemption and puts itself on the hook to pay you for all the hours you work and overtime when you work more than 40 hours a week.
Exempt employees fall into the executive, administrative, professional and outside-sales categories.
Their duties within those categories determine if the workers are truly exempt. For example, in the executive category, a manager's primary duties must consist of supervising, and the person has to manage at least two full-time employees regularly.
Rather than swat away your inquiry, your employer would be wise to use your question as an impetus to ensure its policies are legal.
DEAR CARRIE: Last year, our company cut employees' pay 15 percent because our operations were struggling, and they still are. The executives also closed a division and laid off the employees there. But, three months ago, one of our other divisions hired back a laid-off employee. That person has asked to be restored to the salary she earned before the 15-percent pay cut. All other employees would still have reduced wages, though. Is it legal to nullify the wage cut for just one employee? -- Legal Raise?
DEAR LEGAL: With a few exceptions, companies can legally do that. But they might want to consider the effect on morale.
"As long as there is no union contract, and as long as everyone gets at least the minimum wage of $7.25 per hour, an employer is free to pay any of its employees as much or as little as it likes," said employment lawyer Richard Kass, a partner at Bond Schoeneck & King in Manhattan.
The only restriction, he noted, is that employers cannot discriminate by favoring -- or disfavoring -- employees on the basis of such things as race, gender, age or religion.
So absent a contract or evidence of bias, the law gives employers wide latitude in deciding what to pay their employees. But that doesn't necessarily mean that making an exception for just one employee is the right way to go.
"As a practical matter, the employer might hurt morale if it pays a returning employee more than it pays employees who were there all along," Kass said.
But he said the employees who held onto their jobs actually fared better overall than the employee who didn't.
"Perhaps the other employees should console themselves with the thought that they never suffered a period of unemployment," Kass said. "In that respect, they have been treated more favorably than the employee who is returning."