Let's a company is facing financial hardship due to the economy. Consequently the company decides that the only alternative available is to ...

Question

Let's a company is facing financial hardship due to the economy. Consequently the company decides that the only alternative available is to cut the pay of its employees. In one department it has 3 classifications of employees such as senior machine operator, junior machine operator, and sophomore machine operator. Employees in all 3 classifications basically do the same job. They work under the same conditions, environment, etc.. The only differentiating factor between the employees is their time of service. However the employer decides to give the senior and junior machine operators a raise and cut the pay of the sophomore machine operators from $22.15 to $16.25. Would that pay cut be legal? (Company is federal)

Answer

If the compensation decision was based purely upon job title, experience, or what the company believes a similar position should receive in the immediate area then it is probably not unlawful. If the compensation decision was based on some other factor but explained as having a lawful basis then it may be unlawful depending upon what the underlying factor is.