If your company has a top pay level for each job classification, you probably end up giving some older workers smaller raises than less-tenured employees. That’s fine as long as you can explain that the difference is because of your wage schedules, not age discrimination.
Just make sure you don’t have other barriers to promotions into higher-paid job categories that end up concentrating older workers on lower pay-scale rungs.
Recent case: James Hawthorne, who is over age 40, worked for Baptist Hospital until he was discharged for alleged sexual harassment. He said the charges were trumped up because he had recently complained that he was getting raises that were lower than other employees received.
When Hawthorne sued, the hospital explained that his raises were lower than many others because he had topped out his pay category. While others lower on the scale might get bigger annual raises, Hawthorne couldn’t move higher and only got a cost-of-living adjustment.
The court said the smaller raises were fine, given the employer’s rationale. There was no evidence the real reason for the disparity had anything to do with age. Plus, the court concluded that Hawthorne wasn’t fired as retaliation for complaining about his pay. The hospital showed the underlying reason was poor behavior.
Unless Hawthorne could show he hadn’t engaged in harassment or that the individuals who decided to fire him didn’t believe he was a harasser, their decision could stand. (Hawthorne v. Baptist Hospital, No. 10-11406, 11th Cir., 2011)
Final note: Make sure all employees have a chance to advance into higher-paying positions, no matter their age. More and more older workers plan to continue working past what used to be considered retirement age. Don’t let that reality lead to age discrimination lawsuits.