Companies may refuse their employees’ raise requests

On Behalf of | Apr 27, 2022 | Employment Law -- Employer |

Employee issues involving salary increases during times of rising inflation may lead to allegations of wage discrimination. Employers could, however, mitigate or prevent liabilities related to wages by establishing salary increase policies.

The United States government calculates the inflation rate based on the consumer price index. When the CPI shows a significant increase in the cost of basic goods and services, workers may begin asking their employers for unscheduled or higher raises.

Establishing policies covering wage increases

As reported by Forbes, a survey found that 42% of the employers responding said their workers asked for raises based on the rising cost of living. The survey also showed that less than a quarter of the employers planned to increase their salary budgets to match the CPI. In many cases, a policy outlining salary increase guidelines could help prevent claims of wage discrimination.

As noted by the Society for Human Resource Management, employers may deny requests falling outside of established increase ranges. Management may also consider requests unreasonable if they do not reflect a position’s responsibilities and tasks. If a refusal appears biased or discriminatory, however, an employee may allege a violation of state or federal labor law.

Preparing rejections based on facts and policy

Inc.com notes that managers may help avoid issues by scheduling appointments to discuss raise requests. Taking the time to sit with an employee in private could help prevent a heated exchange. Industry-standard pay facts, a review of company policies and acknowledging an employee’s cost-of-living concerns may bring about a better closing to a rejection.

Employers may consider proactive measures and develop policies to prevent wage disputes from becoming legal actions. Consistency and adherence to established guidelines could make a notable difference in how wage-related issues turn out.