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This report includes a summary of key changes, including the salary level test and salary basis test.

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January 31, 2010
Avoid Legal Troubles When Considering Pay Raises for Employees

In a BLR webinar entitled "Where's My Raise? How to Handle Tough Pay Conversations With Employees," Theresa Murphy of HR Partner Advantage and David Wudkyka of Westminster Associates explained that, generally speaking, U.S. employers are not lawfully required to provide pay raises to their employees. Exceptions include federal, state, and local minimum wage requirements and any contractual obligations you may have in this arena (e.g., collective bargaining agreements, individual employment contracts that require raises).

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Here's a good rule of thumb to remember when making pay raise decisions that you feel might prove controversial or troubling for employees:

Always have a very strong, defensible business reason for any and all pay decisions.

Theresa Murphy is the principal consultant for HR Partner Advantage, an independent human resources advisory firm based in Raleigh, N.C. She may be contacted at tmurphy@hrpartneradvantage.com. David Wudyka is the founder and managing principal of Westminster Associates, a Massachusetts-based human resource and compensation firm that specializes in pay, performance and productivity issues. He may be contacted at dwudyka@westminsterassociates.com .

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