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January 31, 2010
Specific Legal Troubles to Avoid When Considering Difficult Pay Raise Situations

In a BLR webinar entitled "Where's My Raise? How to Handle Tough Pay Conversations With Employees," Theresa Murphy, principal for HR Partner Advantage and David Wudkyka, founder and managing partner of Westminster Associates offered the short list of the most common legal issues that may arise in difficult pay raise situations:

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Wage and hour violations

  • Raises structured in such a way that they may void an employee's exempt/nonexempt classification
  • Alternatives to pay raises (e.g., favorable schedule changes or job duty changes) that may also void an overtime exemption

Discrimination claims

  • Raises given (or withheld) in ways that discriminate against workers in protected classes or that have a disparate impact on them
  • Raise alternatives (e.g., title changes, schedule changes) given in lieu of raises that have the same discriminatory or disparate impact
  • The added challenge of the 2009 Lilly Ledbetter Fair Pay Act (the clock now starts over on claims every time you discriminate with raise decisions)

Collective bargaining agreements

  • Raises structured so that they violate CBA provisions such as cost-of-living adjustments or automatic scheduled pay increases

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 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 .

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