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Beware disciplining by withholding pay raises

by on
in Compensation and Benefits,Discrimination and Harassment,Human Resources

Any adverse employment action—including withholding an ex­­pected pay increase—can form the basis for a discrimination lawsuit. If you hold back raises to punish rule-breaking, make sure you can show you do so impartially.

Recent case: Marge, who is over age 40, worked at a Rite Aid pharmacy. She sued after her store closed and she was terminated. Marge claimed she had been discriminated against.

Among her allegations: She had been aggressively investigated and denied a raise when she was caught in possession of a single prescription drug pill, which violated company policy. She said a younger pharmacist who broke the same rule received a raise.

The court said her case could go to trial, based on the different treatment she alleged.

Fortunately for Rite Aid, Marge lost her other claims, including allegations that she was not offered a transfer to another location while others were. That may limit the payout, as all Marge has lost (and can recover) is the raise amount, calculated back to the date the store closed and she lost her job. (Iannucci v. Rite Aid, No. 1:11-CV-281, WD NC, 2012)

Final note: Someone in HR should monitor all discipline. On a regular basis, perform an informal internal audit. List every disciplinary action, along with the specific reasons the employee was disciplined. Then compare all ­disciplinary actions to see if the same rule violation always produces the same punishment. If so, no problem.

But if there are differences, you need to know why. Place a detailed explanation in the audit file in case of litigation down the road.

Be especially careful if it looks as if a specific supervisor is handing out different punishments. That may indicate bias. Compare his subordinates’ EEO characteristics (age, race, etc.) to look for a pattern.

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