Pay cut for poor work? Document carefully
Maybe it’s worth a try. If an employee isn’t working as hard as you expect, reducing his pay might conceivably provide enough of a kick in the pants that he’ll pick up the pace.
As long as you carefully document why you are making the pay cut, he won’t win a discrimination case even if his pay puts him at a lower level than others outside his protected class who perform the same job.
Recent case: Darren Jones, who is black, worked as a delivery driver for a tire distributor for 10 years. During more than half of his tenure, he was paid as much or more than his co-workers, whatever their race. Then his pay was reduced while others got increases, placing him at the bottom.
Jones quit and sued, alleging race discrimination in pay.
The tire distributor countered that Jones had had disciplinary and performance problems. In fact, he admitted to having had 24 work-related problems over the decade. Because of his poor performance, the company said it cut his pay and gave increases to co-workers with better records.
Jones tried to argue that the company was not being honest. He reasoned that if his poor performance was so important to the company, it would have terminated him.
The court rejected that contention. It reasoned that employers are free to choose how to handle poor performance. Employers can fire employees, demote them, cut their pay or do nothing. It’s up to the employer to choose the best tactic. (Jones v. Boyle, et al., No. 11-3098, 3rd Cir., 2012)
Final note: Courts really don’t want to run HR for you. Give judges lots of information to support your decisions. The best way is to document every decision at the time you make it.