If you do your job you should get paid what you’ve been promised by your employer. Right? Well, not always.
Let’s say your employer has agreed to pay you a certain amount each week, but something happens — maybe your work is subpar, or you sexually harass another employee, or the company you work for is having financial troubles.
Your boss is indeed legally allowed to reduce or dock your pay. But like all things in life there are exceptions. There are cases when reducing someone’s promised pay can run afoul of labor laws.
In most cases, it’s easier to dock the pay of an hourly worker than that of a salaried employee.
If you’re a salaried worker and make no overtime, your salary cannot be reduced based on the quantity or the quality of your work, says Beth Anne Wolfson, adjunct assistant professor at Bentley College in Waltham, Mass.
“If an employer improperly docks an exempt employee's salary, it runs the risk that the employee will no longer be considered exempt. If that occurs, the employee would be entitled to overtime pay for work in excess of 40 hours a week,” she explains.
But, she adds, the rule doesn’t apply in the following situations: “An exempt employee is absent for a day or more for personal reasons; absent for illness (where the employer has a plan in place for wage compensation); absent pursuant to the Family and Medical Leave Act; or absent for suspension of one or more days due to violations of workplace conduct rules.”
Philip Gordon, a Boston-based attorney who represents workers, says he’s hearing more and more instances of pay-docking in the workplace these days.
“Employers are looking for more carrot-and-stick methods for controlling their work force, and they are looking for more creative ways to do that,” he says. “One thing they are finding is that employees respond very well when it hits them in their pocketbooks.”
Don’t just let an employer take a bite out of your paycheck. Gordon suggests workers know their rights and find out if any hit to their wages is permissible under the law.
Here are a few scenarios when a reduction in pay is potentially illegal for both hourly and salaried workers:
- Your pay is docked for discriminatory reasons, i.e. because you’re a minority, you filed a workers compensation claim or you blew the whistle on some illegal deeds at your company.
- Your pay is docked and you end up making less than minimum wage.
- You have a union contract that includes no provisions for docking pay.
- Everyone at your company who is over 40 is docked pay. This sends up age discrimination red flags.
Bottom line, if you feel you’ve been docked pay improperly go to your human resource department to discuss your situation. If that goes nowhere, contact your local department of labor if it’s a pay dispute, and the Equal Employment Opportunity Commission if it’s an issue of discrimination.
You also can talk to a lawyer to see whether you have a case, but it might be hard to get an attorney to take on the work because typically the money involved is not enough to make it worth their while.
Here are some of your questions:
I have a question about pay being docked. Is it legal for pay to be docked for cursing in the workplace?
—Docked Pay Cassie
The answer to this question will differ depending whether you are paid a salary or an hourly rate.
First for salaried employees: “The question is whether the salary is a sham,” asks Gordon. “In other words, by making deductions from the employees' pay, is the employer really paying a "salary"? If the employer isn't paying a proper salary, then the employee must get overtime. The federal rules help us understand if a deduction is proper.”
The rules, he explains, “permit docking a salaried employee's pay for absences of a day or more for personal reasons, other than sickness or accident.” And, he adds, “employers may deduct ‘penalties imposed in good faith for infractions of safety rules of major significance,’ which include things like smoking in explosive plants.”
But if other lesser infractions such as cursing are now added to the list then the company may be violating the rules.
For hourly workers deductions in pay are pretty much allowed across the board unless the reduction translates into a worker being paid less than minimum wage, or the dock in pay is discriminatory.
You could argue that you were improperly docked pay if your managers never informed you of a policy that you would lose wages if you cursed. And you could argue that you were being treated unfairly if only you were docked and others were not. If only women are docked for cursing and not men you may have a case of discrimination on your hands.
I am a 58-year-young woman, with an excellent work history and exceptional references. I was hired as a marketing director for a skilled nursing facility. After two weeks on the job, the census dropped by three, not uncommon in the industry. My then administrator panicked and thought I was not doing my job. She then placed me in the office doing paperwork on new admissions. I have a contract with this company stating what my duties are and my salary plus bonuses. I am now left in an entry-level position where I am not responsible for my bonuses. I was told if I did not like the situation, I would have to 'prove myself' in this entry level position and maybe, just maybe, I will get back the job for which I was hired.
What are my recourses in this matter? I really don't want to find another job, which I can do, but would rather not. I feel this company has not lived up to its agreement with me. Your opinion is much appreciated.
—C.M. from a “Strange Company”
Unless your contract explicitly states you were to have a certain position and be paid a certain amount, including bonuses, for a specific period of time you probably don’t have a leg to stand on. In most cases, employers add a line to contracts that pretty much says you have no guarantee of employment.
Since most workers are emplyed “at will” and are typically without an employment contract, “an employer is free to reduce your pay or demote you whenever they want to and the employee is free to leave when they want to,” says Tammy McCutchen, former administrator of the U.S. Department of Labor's wage and hour division, and now an attorney with Littler Mendelson, one of the nation’s largest employment law firms.
Typically the only employees who have such contracts are executives.
So CEOs get the big bucks and the protection? “That’s right,” says McCutchen.
She did add that no employee could be fired for discriminatory reasons. If you suspect your demotion was in any way based on your age then you might have a case.