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Cutting an employee’s pay is perfectly legal, but first review his potential for a bias lawsuit

by on
in Employment Law,FMLA Guidelines,Human Resources

Employers can cut an employee’s compensation at any time for any nondiscriminatory reason, as long as the person isn’t covered by a union contract or other agreement.

But before you do so, consider whether this person could claim that he or she being singled out for age, race, sex, disability status or even recent use of FMLA leave.

Recent case: Sheryl Taylor woke up with a sinus infection and called in sick from her cashier’s job. She saw her doctor and got a prescription and a return-to-work form.

Meanwhile, her boss fired her and offered the job back only if she accepted a pay cut. She declined and sued, alleging retaliation for taking FMLA leave.

But Taylor wasn’t eligible for leave because the store didn’t employ enough workers to hit the “50-employees-within-75-miles” threshold. The court found nothing illegal about the pay-cut offer since Taylor was an at-will employee who wasn’t covered by an employment contract or union agreement. The court ventured that even under FMLA, a cut wouldn’t be retaliation if all similarly situated employees also took a pay cut. (Taylor v. Texaco, No.4:04-CV-212, ND GA, 2007)

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