Can employers change pay or it's structure?

[Dave]

I thought I'd bring my concerns to this site for some advice. Please treat it as such.

My question is this: Can a employer change things such as pay? While I know, starting wage can be adjusted from time to time as the need determines, can it be done without changing the pay of current workers. Let's say Bob started 4 years ago at $7.00 an hour and through increases now makes $9.25 an hour. The company, changing with the times, raises it's starting pay to $9.00 an hour. Do they owe Bob the same increase?

What about yearly reviews or raises? Let's say the company had a policy, that all yearly reviews or raises would be given at a 0 to 5 percent rate depending on preformance. Over years of employment 5 percent could become a pretty good raise. If a company sees this, can they than change that to a set amount like 0 for below standard, .10 cents for meets standards, and .25 cents for exceeds standards? Would there have to be a grand father clause instated?

Any input would be helpful.......

Thanks

Dave

[Platypus]

My question is this: Can a employer change things such as pay? While I know, starting wage can be adjusted from time to time as the need determines, can it be done without changing the pay of current workers. Let's say Bob started 4 years ago at $7.00 an hour and through increases now makes $9.25 an hour. The company, changing with the times, raises it's starting pay to $9.00 an hour. Do they owe Bob the same increase?
Morally, maybe. Legally, absolutely not. This exact phenomenon is actually one of the things that drives job-hopping in high tech. The simple fact is that very few companies have allowed raises to keep up with the market, so it has always been the case that people could increase their salary faster by changing jobs every year or two than by staying in one place.
What about yearly reviews or raises? Let's say the company had a policy, that all yearly reviews or raises would be given at a 0 to 5 percent rate depending on preformance. Over years of employment 5 percent could become a pretty good raise. If a company sees this, can they than change that to a set amount like 0 for below standard, .10 cents for meets standards, and .25 cents for exceeds standards? Would there have to be a grand father clause instated?
Nope. The company legally has no obligation ever to raise pay. They could leave you at the same salary forever and, unless you had it written into your employment contract when you started (which no employer would accept), you'd just be SOL. In fact, since it's so difficult to dismiss an employee for underperformance, many companies encourage such employees to leave by giving them no raises for a few years.

[Dave]

Thanks for your input.... My last question, would these changes have to be for the whole company or could they just pick and chose where they instate this practice. Could companies like Target, Wal-Mart, or any multi location company have different policies for different locations?

Thanks

Dave

[Albert]

I thought I'd bring my concerns to this site for some advice. Please treat it as such.

My question is this: Can a employer change things such as pay? While I know, starting wage can be adjusted from time to time as the need determines, can it be done without changing the pay of current workers. Let's say Bob started 4 years ago at $7.00 an hour and through increases now makes $9.25 an hour. The company, changing with the times, raises it's starting pay to $9.00 an hour. Do they owe Bob the same increase?

What about yearly reviews or raises? Let's say the company had a policy, that all yearly reviews or raises would be given at a 0 to 5 percent rate depending on preformance. Over years of employment 5 percent could become a pretty good raise. If a company sees this, can they than change that to a set amount like 0 for below standard, .10 cents for meets standards, and .25 cents for exceeds standards? Would there have to be a grand father clause instated?

Any input would be helpful.......

Thanks

Dave

The answer to your question depends on two factors: One are wages usually collectively bargained and two, if not are wages published or stated in policy in some way?

If your employer is subject to collective bargaining either formally through a Union contract or informally through representatives such an action would require approval through the same process. Failing to do so would constitute an unfair labor practice, unilaterally changing the terms and conditions of employment without bargaining the impact.

If your employer is not subject to collective bargaining but has established hiring guidelines that include pay structures and longevity advancement then you may have a discrimination lawsuit. The rationale would be that the employer engaged in discriminatory practice by unfairly rewarding newer employees at the financial expense of those more senior.

If the answer is none of the above I would recommend starting the process of finding a better employer which, as Plat suggested may be the most effective strategy.

[Gale_Force15]

This is assuming your edito- er.. boss wasn't a trigger happy, money hoarding nut job who wont even give you a raise even though you've gotten better, and the rent is going up.

[cpwill]

how much an employer pays is entirely up to the employer (within, of course, limits proscribed by the minimum wage).

[atshvets513]

As long as the minimum wage is not violated, I don't see any other obstacles, in the US atleast ;) .

[Blueangel]

My question is this: Can a employer change things such as pay? While I know, starting wage can be adjusted from time to time as the need determines, can it be done without changing the pay of current workers. Let's say Bob started 4 years ago at $7.00 an hour and through increases now makes $9.25 an hour. The company, changing with the times, raises it's starting pay to $9.00 an hour. Do they owe Bob the same increase?I know UK employment law like the back of my hand, but US employment law is dramatically different. I'd advise you to pay good attention to the excellent advice given by Platypus and Albert. They both know their stuff and I can't fault their advice.

A lot depends on when your next pay review is due. For all you know at this stage, the long term rate of pay may be due for a favourable review and increase in line with the raise in the new starter's rate.
You have two factors to consider that would prevent you from getting in hot water yourself.
Government legislation comes in overnight and companies have to abide by it and budget accordingly. It can be a full financial year before the real effect/impact of legislative change can be truely assessed via an audit. There may be company tax breaks to take into consideration.
Secondly, it could take a further three months to assess how to adjust the necessary pay increase for long term workers, so as to implement in a way that will not radically affect the companies budget and necessistate possible cut backs and redundancies.

If you are in a trade union, a union's first priority is to preserve jobs above all. By all means lodge your grievances and ask for a response in due course but do be prepared to wait for a full reply. Pressure from any quarter at a stage of imposed transition is detrimental to all.
The companies number one priority is to preserve their standing and keep their skilled staff.
I think you can see that there is a common area of importance with the union and company view here. If everyone concerned concentrates on the shared goals, the other issues inevitably get dragged up to an acceptable standard for all. It's only when they don't that you should have good grounds for grievance and concern. I know it's a pain, but patience is all in these circumstances.
I hope it all works out well for you Dave.

[Blueangel]

Thanks for your input.... My last question, would these changes have to be for the whole company or could they just pick and chose where they instate this practice. Could companies like Target, Wal-Mart, or any multi location company have different policies for different locations?

Thanks

Dave
That entirely depends on your company's and union's bargaining structure. By all means make enquiries about this.
In my experience, the bargaining structure is decided during the annual pay rise negotiations and often used as a bargaining tool itself.
The company I worked for was always trying to change our renegotiation date from December 1st to mid summer. It was the view of the membership that the company was scared of possible industrial action in the lead up to Christmas, so on their instruction, the union preserved the December date for 15yrs...until last year. Then the company offered a substantial pay increment to have the bargaining date moved to July, thus bringing us in line with the rest of their bases in the country. Despite the unions advice that this would severely reduce our collective bargaining power, the members were swayed and voted for the change. At the end of the day, the unions have to abide by the majority vote of their members.

As a former trade union rep, I saw a transition from international to national to regional to individual site bargaining, and back to regional bargaining. Depending on your local, regional bargaining is often the best scenario.
My workplace had six unions because of the diversity of skills within the company. My particular union had the largest membership, but the most powerful union was transport and haulage. This is often the case in industry.

Regional bargaining allows for far more individual factors to be taken into consideration such as, the local economy and cost of living, travel to work costs, localised taxation and tarrifs, etc. It's more beneficial to the employee in the long term, but can also be manipulated by some companies to justify relocation costs.

Companies like Walmart, who do attempt to have multilateral bargaining, inevitably hit a brick wall because it doesn't take into account local employment legislation and cultural differences. Walmart in particular, had this problem in the UK for failing to fully take into account the implications of the EU Working Time Directive and UK Employment Law.

[atshvets513]

Originally posted by Gale_Force15
This is assuming your edito- er.. boss wasn't a trigger happy, money hoarding nut job who wont even give you a raise even though you've gotten better, and the rent is going up.

Hmmm... New job perhaps :) ?

[JD3]

My wife is a nurse (I was one --LPN--for a while as well), and we we always told not to discuss our pay. What we learned over the years was that moving job to job was more profitable because starting wage caught up to us very quickly, faster than raises.

So, I think it can be done without raising the pay of those who have been there. But it is likely to cause resentment and I think a poor idea.

[Dave]

See, this is where I see the problem? And yes it's all about money. You have Bob working for the company for 20 years. He has to be a good employee or else 20 years would not have been obtainable for him. Policy states he can recieve 0 to 5 percent on a yearly review and one merit raise a year. So, although Bob started at $6 an hour 20 years ago, his rate of pay now is more like $19.75. If you change the raise structure and take away the 5 percent and replace it with .25 cents for the good employee, the company just saved .70 cents an hour per year on that one employee. A company like Target & Wal-Mart, which 20 years ago was not the comanies they are today are searching for ways to lower cost. When they recruit new ideas that hurt the long term employee that has bought into the idea of the company, it bothers me. Is a union needed.... I think not. I'm no fan of unions. However, with the talk that's going on right now, something will be done. The employee's, by sheer numbers, can change anything. Most people do not understand the amount of money the stores produce and fall way short on the expectations that can be achieved in pay at the store level.

Thanks

Dave

[JD3]

See, this is where I see the problem? And yes it's all about money. You have Bob working for the company for 20 years. He has to be a good employee or else 20 years would not have been obtainable for him. Policy states he can recieve 0 to 5 percent on a yearly review and one merit raise a year. So, although Bob started at $6 an hour 20 years ago, his rate of pay now is more like $19.75. If you change the raise structure and take away the 5 percent and replace it with .25 cents for the good employee, the company just saved .70 cents an hour per year on that one employee. A company like Target & Wal-Mart, which 20 years ago was not the comanies they are today are searching for ways to lower cost. When they recruit new ideas that hurt the long term employee that has bought into the idea of the company, it bothers me. Is a union needed.... I think not. I'm no fan of unions. However, with the talk that's going on right now, something will be done. The employee's, by sheer numbers, can change anything. Most people do not understand the amount of money the stores produce and fall way short on the expectations that can be achieved in pay at the store level.

Thanks

Dave


How? If you walk, you'll be replaced, right? If you complain, they could let you go. If you organize, that'll be Union talk. They hold all the cards, don't they?

[Platypus]

How? If you walk, you'll be replaced, right? If you complain, they could let you go. If you organize, that'll be Union talk. They hold all the cards, don't they?
Exactly. Laissez-fairies like to pretend that all parties to a contract have equal leverage, but that's simply not the case. As the old saying goes, the fox is running for a meal but the rabbit is running for his life. When the negotiation involves the employee's livelihood vs. a very minor budget item for the employer, it's obviously not an equal situation. Collective bargaining came about - and became law - to address that, even if unions have often failed in that role and become abusive to workers in their own way. That's a problem of implementation, not principle.

[Dave]

IMO unions are not the answer. I never cared for anyone speaking for me. However the threat of unions goes a long way. Right now we have a shut door on this issue and management will not even discuss it. It's just the way it is, we are told. About a week ago every employee at my place of employment recieved a union flier. Management has taken notice. We have every VP in the company coming to our facility requesting we talk to them. It's amazing, how that door just opened. The worker can have a voice and that voice can demand.....

Thanks

Dave

[patrickt]

I'm retired now, Dave. Over thirty years I hired attorney's on more than once occasion to fight with the company. A couple of comments. Someone already stated that personnel manuals and such are binding. They actually are. True, the company can change them when they want but whatever is in the manual on a given day is binding. My boss thought since they wrote the manual they were free to ignore. He was wrong. Another tidbit. My boss was willing to lie in court but a daily journal of your professional activity is accepted in court as true unless there is evidence to the contrary. It's part of normal business records.

Threats are made from positions of weakness. Threats are an absolute last resort. What organizations don't want are problems. They will give a lot to avoid waves.

I not only never joined a union, I was fired once for refusing to join a union. A union's first responsibility is to protect the union. The second is to protect all worthless, corrupt employees.

[green lantern]

I'm retired now, Dave. Over thirty years I hired attorney's on more than once occasion to fight with the company. A couple of comments. Someone already stated that personnel manuals and such are binding. They actually are. True, the company can change them when they want but whatever is in the manual on a given day is binding. My boss thought since they wrote the manual they were free to ignore. He was wrong. Another tidbit. My boss was willing to lie in court but a daily journal of your professional activity is accepted in court as true unless there is evidence to the contrary. It's part of normal business records.

Threats are made from positions of weakness. Threats are an absolute last resort. What organizations don't want are problems. They will give a lot to avoid waves.

I not only never joined a union, I was fired once for refusing to join a union. A union's first responsibility is to protect the union. The second is to protect all worthless, corrupt employees.
unions have their good and bad points. you say they their "second job" is to protect all the "worthless and corrupt employees", what about those employees that actually give a 100% and care about doing a good job? they "protect" those people also. as far as personnell manuals go, the companys can and do change those manuals on the fly, and the company is not bound to anything in those manuals. if you are trying to unionize, THEN those manuals are binding and considered "contracts" .