With all the focus on compliance with the new Fair Labor Standards Act overtime regulations, employers should take a step back in order to consider one particular trap that might result — pay inequities that can hurt morale and also violate other employment laws, such as the Equal Pay Act, the Age Discrimination in Employment Act and Title VII.
Here’s how — let’s assume you’ve done a great job transitioning previously exempt employees (say a group of assistant managers who don’t meet the executive or any other exemption) to hourly wage earners. Let’s also assume you tracked their weekly work hours in order to calculate equivalent hourly rates by dividing the weekly salaries by the average amount of time worked. Now, take a step back — do you see any hourly pay rate differences among individuals doing the same jobs and, more importantly, can you explain them?
If you do see differences, but have a hard time explaining (and potentially defending) them, you might want to tweak the hourly pay rates to ensure consistency among those workers with the same level of experience, job duties, work performance, etc. In the future, you can up the pay of the higher performers. Just think of this as part of the “reset” demanded by the new overtime regulations and a way to buy yourself some insurance against a possible wage discrimination claim.