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Transferred employee: To cut or not to cut his pay?

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in Employment Law,Human Resources

Problem: Jim is a 20-year employee who can no longer perform his regular job due to poor health. You decide to transfer him to a department to do different work that is performed primarily by women. The women there are paid less than what Jim was paid in his former job.

Do you reduce Jim’s pay to the women’s level to avoid an Equal Pay Act claim?

Answer: You don’t have to cut Jim’s pay. The Equal Pay Act provides a “red circle” rate which allows you to continue to pay the employee his or her present salary, which is greater than that paid to the opposite gender employees, for the work both will be doing.

Under such circumstances, maintaining an employee’s established wage rate, despite a reassignment to a less demanding job, is a valid reason for the differential even though other employees performing the less de­­manding work would be paid at a lower rate, since the differential is based on a factor other than sex.

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