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Beware legal risks of raising employees’ titles in lieu of pay

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in Compensation and Benefits,Human Resources

When budgets for raises are lean, it’s tempting to reward employees with a better title than a hefty pay increase. That’s risky.

“While employers may have good intentions, if you start inflating titles, the titles themselves don’t reflect the duties of the position and required expertise,” says John Skousen, a partner with the law firm of Fisher & Phillips in Irvine, Calif. It can also cause confusion about exempt/nonexempt job classifications—and result in a lawsuit that will cost far more than a proper raise would have.

Skousen urges employers to consider these issues before succumbing to “title inflation:”

Steer clear of negligent promotions. It’s risky to give someone a responsibility he is not capable of doing—or a title that suggests something he is not really doing. This may occur inadvertently when “promoting” by consolidating two or more positions into one job, leaving an employee unable to perform certain new funct...(register to read more)

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