When a Pay Increase is Appropriate

by Mammoth Team on November 29, 2016

Pay Increase

 Q: Is it legal to give an employee a raise based on our need for her to work more hours? The tasks assigned to the employee require more time than we initially estimated. She’s doing a great job, so we’d like to offer some added incentive for her to “sign up” for more hours than we originally advertised.

A: Increasing an employee's hourly rate of pay is, of course, legal. As a best practice, however, we generally recommend that increases in pay (other than merit or cost-of-living increases) come with a change in job duties. For example, if an employee is given an added responsibility or new projects or people to manage, a pay increase would be appropriate based on the increased value of the position. If the same tasks are being performed for more hours of the week, a pay increase makes less sense since the job itself didn't change and the employee will be compensated for the extra hours.

All that said, it sounds like you’re asking this employee to take on more than originally bargained for, so a pay increase may make sense even though the nature of her duties hasn’t changed.

As with any pay increase, you'll want to be certain that similarly-situated employees are treated consistently. If her pay increase is out of the ordinary because she’s already proven herself extremely valuable, that’s okay, just be sure to carefully document the reasons behind your decision.

You’ll also want to be cognizant of whether the increase in hours worked impacts this employee’s eligibility for company benefits or would result in a classification change.

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Topics: Best Practices, Wage & Hour