Never rework compensation packages behind employees' backs. Provide advance notice when making changes that affect their compensation or benefits.
Nearly every state has a wage-payment law requiring you to pay employees in a timely way and to notify workers in advance of changes affecting their pay.
Recent case: Sales rep Gerald Winslow received pay solely on a commission basis. But, without notice, his employer changed the company's commission formula, causing Winslow's pay to drop significantly. He didn't find out until he opened his check.
He sued, alleging fraud and violation of New Jersey's wage payment law. A state appeals court sided with Winslow. Plus, the fraud claim stuck because the company's sales managers knowingly withheld information about the pay change. (Winslow v. Corporate Express, No. A-6309-01, New Jersey App Div., 2003)
- How to Fire an Employee the Legal Way: 6 Termination Guidelines
- Contractor or employee? How to make the call and avoid an IRS audit
- Double-check for signs of retaliation whenever workers complain of discrimination
- Employer trade group pushes to privatize workers' comp
- ACA repeal threatens tax-free health benefits