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Employee Underpaid
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Employee Underpaid
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I have just started doing some HR consulting for a non-profit organization. There is a new Director in place and he has discovered that there is an employee who has not received their scheduled annual
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Employee Underpaid
posted at 12/7/2009 6:18 PM EST
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Posts: 4
First: 12/7/2009 Last: 1/19/2010 |
I have just started doing some HR consulting for a non-profit organization. There is a new Director in place and he has discovered that there is an employee who has not received their scheduled annual wage increase for the last 6 years. As far as he knows, the employee has never come forward to report the mistake. All employees are made aware of scheduled wage increases.
Can anyone provide any advice on the employer's obligation regarding paying the employee retro pay for the last 6 years? Is there any obligation on the part of the employee to come forward and report the error? The employer would like to correct this error going forward, but is unsure whether they are obligated to make full retro pay for the last 6 six years. Any advice on this would be greatly appreciated. |
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Employee Underpaid
posted at 12/8/2009 2:16 AM EST
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Posts: 1771
First: 10/24/2002 Last: 9/14/2011 |
You have no legal obligation to correct the error, and if you choose to do so, you have no legal obligation to correct it retroactively.
The employee did not have any legal obligation to report the error. If it had been me, I probably would have just found myself a new job. The fact that he stayed there for six years tells me that he either really wasn't aware that he should have gotten an increase, or he just has very low self-esteem. |
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Employee Underpaid
posted at 12/8/2009 2:53 AM EST
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Posts: 155
First: 8/24/2009 Last: 2/9/2010 |
Or he stayed there because money wasn't his motivator and he had another reason wor working there.
I agree, absent some really really unique circumstances their is no obligation to report it. There may be an issue in regard to fixing it if for example it is a written company policy to provide the increase. Some states, CO comes to mind, require that a company enforce it's polcies almost as if they were law. |
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Employee Underpaid
posted at 12/8/2009 4:12 AM EST
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Posts: 237
First: 7/10/2007 Last: 8/31/2011 |
Youâve been advised correctly about there being no obligation to adjust the employees pay. It seems unlikely to me that an employee who was doing their job would be passed over for a rate adjustment for 6 years without a reason. This assumes that there were funds available to give raises during this time frame and others were given raises. Could be performance issues, some sort of agreement of a fixed rate for the services provided, comp fixed by a grant which originally funded the position, or maybe just bad blood between the employee and the former Director. Dig around some more, I bet thereâs more to the story.
Possible Gotcha: IF others were given raises in this period; IF there are no performance or disciplinary issues in the employeeâs file; IF there is no other business reason to not adjust the pay rate; AND the employee happens to be in a protected class, itâs possible that the personal might deduct that his/her protected class status was the reason for being passed over. (I actually did encounter this once on a contract. In that case there were apparently performance issues which I had not been documented.) Another possibility: As HR PRO indicated, employees in the NP sector tend to be mission-driven. It might very well be that the position was originally funded by a grant or dedicated gift. When these funds ran out the project was rolled into the operating budget with an understanding that the employee would remain at the same rate. |
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Employee Underpaid
posted at 12/8/2009 4:27 AM EST
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Posts: 155
First: 8/24/2009 Last: 2/9/2010 |
The obvious question no one has asked is "what does the employee have to say about the matter?"
While admittedly any one of us could come up with the scenario of an angry former employee making a legal case about something like this, a key component to this dilemma is what does the employee want, know, seek, etc. |
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Employee Underpaid
posted at 12/8/2009 5:06 AM EST
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Posts: 2146
First: 2/15/2006 Last: 9/14/2011 |
And it is truly possible that this employee turned down a raise if they are working there for altruistic reasons. My father works for a not-for-profit and I could see him doing exactly that.
I would do a lot more investigating before making any assumptions! |
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