Why am I not getting a raise?
March 25, 2015 4:06 PM   Subscribe

Is there any legal precedent to fight raises for only incoming employees and not existing staff?

You are not my lawyer. My employer is looking to have more competitive salaries for a particular job class (for one which I am a member). However, boss has indicated the raising of the minimum incoming employee salary will not affect those who have been here for years except for those that would fall below a newly minted employee. For example, with fake numbers: We offer 90K to a new employee of said type but our competitor across the street starts at 100k. Boss plans to raise the minimum incoming salary to 100K and bring up those existing employees <100k to the 100K number regardless of years of service. Even more astounding, there are some of us with nearly 20 years of experience who make 125K (we started at 65K back in the day) who are not going to get a pay bump, presumably because budgets are tight and more subtlety, we are nearing a full pension (halleluyah in this day and age) and we've got no where to go without jeopardizing it. Logic would tell you that everyone should get a commensurate percentage raise or some multiplier to account for years of service, no? We are in the public sector.

Advice? Also curious how public vs private sector might change one's answer.
posted by teg4rvn to Law & Government (20 answers total) 2 users marked this as a favorite
In general, this seems like a thing that would be allowed. However - age discrimination laws kick in (federally) at age 40. If existing employees are more likely to be over 40 than new employees, then a policy like this might (might!) illegally discriminate based on age.

But no, logic does not at all say that pay for new employees should have anything to do with pay for existing employees - that's just not how these things work.
posted by brainmouse at 4:11 PM on March 25, 2015 [1 favorite]

Logic would tell you that everyone should get a commensurate percentage raise or some multiplier to account for years of service, no?

Logic hasn't much to do with it. Starting salaries and minimums are set to recruit and retain hires at that level, who have different circumstances (e.g. college tuition debt, size of job market) from long-term employees.

Perhaps there a marginal question of age discrimination. Perhaps in your particular part of the public sector there's a legislative basis for grading. But in general terms, if you want the differentials up the salary/experience scale, then you need to make a case for them. That's historically what unions do.
posted by holgate at 4:18 PM on March 25, 2015 [3 favorites]

Your boss knows two things relevant to this issue. He knows that you, and everyone else in your position, is willing to come in every day and do this job for $125k. He knows this because you and everyone else in your position is coming in every day.

He also knows that bringing in someone new is going to cost $100k, rather than the $90k it used to cost. He knows this because it's what people elsewhere are getting.

What you have not established is why the second thing your boss knows changes anything about the first thing your boss knows.
posted by gauche at 4:21 PM on March 25, 2015 [30 favorites]

My public sector job just did this for a whole bunch of employees -- raised the minimum for that job from like $9/hour to $11.something/hour -- and the only existing employees who got a raise were the ones making below the new minimum. It pissed a lot of people off but we've got a whole legal department here so presumably it was all aboveboard.
posted by jabes at 4:27 PM on March 25, 2015

My last employer (large nonprofit) did this, with the rationale that even if one person has been doing the job for 15 years and the other has been doing it for three months, they are doing the same job and should reasonably be paid the same. (They did end up giving a small additional bump--like 5K--to people with >5 years at the job). But it was in a field where most people who had been on the job for more than 6-7 years had received promotions that included raises, so there were relatively few people who had been there 15-20 years who were getting the same pay as a new hire.

Basically, your boss can make a case to increase the entry level salary because your workplace needs to be able to hire new people, which will cost them 100K because that's what others are offering. But everyone already at your company is apparently happy with the salary they are already making, because they're still working there, and so there is zero business case to be made to increase their salary beyond basic equity with new hires. The only question they might need to consider is whether the people who have been at your workplace 5-10 years could go to the corporation across the street and get more. If you're making 125 and the company across the street maxes out at 120 for your kind of job, your workplace REALLY doesn't have an incentive to raise your pay.
posted by The Elusive Architeuthis at 4:46 PM on March 25, 2015 [1 favorite]

How is it going to work for raises from now on? Do you all just get step raises, so the people at 100k, be they new hires or people with a few years experience, will get the same raises from now on?

But it's legal, and the only way it might change is if all the old timers leave for better jobs AND the city feels it needs people with more experience. If you all aren't willing to leave because you're waiting for pensions to vest, you've lost the absolute only bargaining chip there is.
posted by jeather at 4:48 PM on March 25, 2015

Discrimination is not illegal.

Discrimination based on a protected class is illegal. Length at a job is not a protected class. You could conceivably make a claim based on age discrimination, but such a claim would be quite difficult to prove and further would require you to sue your employer (the state!) for it to make any difference.

I'll dismiss that idea out of hand - you have no reasonable course of action here other than to find a new job. The law here is somewhat irrelevant, because even if the action is illegal (it isn't), you have no reasonable way to enforce the law without suing your employer. If you do that, you'll find that you are not particularly employable in the future.

Lest a contract to the contrary, your employer is never under an obligation to increase your pay at all.
posted by saeculorum at 4:49 PM on March 25, 2015 [3 favorites]

Logic would tell you that everyone should get a commensurate percentage raise or some multiplier to account for years of service, no?

This statement is also false. A rational employer pays you the lower of the following two numbers:
  1. The amount necessary to retain you as an employee.
  2. The amount necessary to hire an equivalent new employee (training/replacement costs included).
Note that the number of years of service is not directly an input to either of those numbers. If you require a higher salary to stay employed at your employer, you may increase #1, but you may then find out that #2 keeps your salary lower. If you are doing the exact same work as someone available right off the street, then despite having done your job for longer, you are still no more valuable to your employer (hence, again, #2 keeps your salary lower).
posted by saeculorum at 4:54 PM on March 25, 2015 [2 favorites]

You really need to call your union steward. This is all in the union labor contract and they can negotiate to add it if not. It may be legal, but the management may change their mind about doing it if it's going to stir up lots of trouble with the union.
posted by amaire at 4:58 PM on March 25, 2015 [1 favorite]

Agree with the above. Also, I'd be surprised if new employees (or even ones who joined in the past few years) are getting the generous pension deal you have, so it might not be all that different in the end.
posted by une_heure_pleine at 5:07 PM on March 25, 2015 [1 favorite]

Pricing in an economy is always demand side driven, and based on marginal utility.

The price to RETAIN an existing employee is the price needed to stop him from going to another job. There's a certain amount of friction keeping an employee at their current workplace - familiarity is good, people are afraid of change, people don't like risk. Say for example if you're earning $100,000 at a job, and a competitor advertises a similar job opening for $110,000. It's unlikely many people would jump ship. The competitor may need to offer say $125,000 before you get people earning $100,000 decide to leave their job to join them. In practice for upper middle class white collar work it seems to be about a 25% pay differential between a long term employee promoted up from the inside versus the amount required to draw in a new hire externally. It's really not uncommon for a new hire to be pulling in 25% more than someone with 10 years experience internally working an identical job. The new hire ALSO presumably has 10 years experience in their own field / other companies, and that experience can be a valuable contribution to your workplace too.

This is why companies really hate it when people discuss their salaries...
posted by xdvesper at 5:57 PM on March 25, 2015 [5 favorites]

It's called Salary Compression. Welcome to middle age.
posted by klarck at 7:00 PM on March 25, 2015 [4 favorites]

My advice is to consult with an employment lawyer. My secondary advice, which is not the algal advice you are asking for, is to look around and see what you're worth on the market.
posted by J. Wilson at 7:01 PM on March 25, 2015

Response by poster: great stuff. maddening, but informative all the same. Our last raise was a weird one. they selected the average salary in the office and gave that "amount" a 5% raise. so there were people getting 10% raises and 0.5% raises.
posted by teg4rvn at 7:03 PM on March 25, 2015

Response by poster: Woops, hit post too quick.

So, in the end I will make about 20% more than a new hire. And this is as a supervisor of 4 individuals in that position. Also, new hires are 99% of the time fresh out of school/training, so my nearly 20 years on the job is not particularly well compensated, at least compared to a newbie. I have had the misfortune of working in the public sector during one of the worst economic down times in our country's history, so cost-of-living or other raises were few and far between (often with gaps of years with nothing). Worst case scenario is that morale will be a bit lower, but in the end, the average Joe likes his/her job and also probably feels a tad bit lucky to have it, particularly for the pension benefits.
posted by teg4rvn at 7:11 PM on March 25, 2015

my nearly 20 years on the job is not particularly well compensated
I have had the misfortune of working in the public sector
raises were few and far between
morale will be a bit lower

If you really believe these, you should get a new job.

If you don't want to get a new job, then you are appropriately compensated.
posted by saeculorum at 7:40 PM on March 25, 2015 [5 favorites]

Our last raise was a weird one. they selected the average salary in the office and gave that "amount" a 5% raise. so there were people getting 10% raises and 0.5% raises.

Fairer perhaps than a percentage raise across the board. For instance, women generally get hired at lower starting salaries for the same positions, even in public-sector graded jobs, and lose thousands in earnings during their careers because of it, not least because any percentage increases are applied to different baselines and increase the salary gap. Averaging out the salary across a position and applying the raise to that figure levels out some of the disparity.
posted by holgate at 7:55 PM on March 25, 2015 [1 favorite]

Response by poster: @holgate Public sector jobs are often HR-bulletproof nowadays. Women in my position all across the country make the same as men. Indeed, the graded raises are fairer from a social standpoint, but sometimes retention is more important for higher ups that are much harder to replace.

@saeculorum Thank you for the economics primer! Put so concretely it makes sense. In the end, public sector jobs like mine have a payoff which is the pension, so the job would have to get really crappy to bail on a soon to be achieved lifetime income not to work.
posted by teg4rvn at 9:49 PM on March 25, 2015

$65,000 in 1995 is worth $100,000 today,because of inflation.
posted by postel's law at 5:30 AM on March 26, 2015

Response by poster: Update: Everyone will be getting a pay bump! Probably about 5% across the board. Boss's boss (someone who is appointed by an elected Board) ruled on it. Sounds like they were essentially agreeing with me on some level in that (since salaries are public information) you can't have newbies with zero experience making the same as veterans who not only have years of experience on them but also years of service to the institution.
posted by teg4rvn at 7:50 AM on March 26, 2015 [1 favorite]

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