Why is older woman targeted for pay cut?
Question: Our board is looking to expand our nonprofit organization, which is having a record revenue year. I am an executive and the second-highest-paid person in our office. I have been asked to take a pay cut, unrelated to my performance, which will make me the third- or fourth-highestpaid person. Everyone else is expected to receive meritbased raises or cost-ofliving adjustments at the start of the next fiscal year.
Is it legal to cut one employee’s salary and nobody else’s when there is no business reason to do so? Does it matter that I am the only employee over 45 and a woman, while the executives who will outearn me after my pay cut are male?
Answer: Your age and gender may not have been conscious factors in your pay cut. But in the eyes of employment law, they could indeed matter — a lot.
Under the federal Age Discrimination in Employment Act, it’s illegal for employers with 20 or more workers to discriminate against any worker age 40 or older. But in practice, courts have found that it’s lawful for a company to lay off its highest earners, who often tend to be older workers, said employment attorney Tom Spiggle. That same business reason — cutting costs from the top — may be in play here, he says.
Still, the fact that you, the oldest worker, are the only high earner being asked to make this contribution to the greater good ... well, that looks a bit dodgy through the ADEA lens.
Shifting perspective to your gender: Title VII broadly prohibits sex discrimination by employers with more than 15 employees. Finally, there’s the Equal Pay Act, which states simply that men and women must be paid equally for performing substantially similar jobs. Unlike the ADEA and Title VII, the Equal Pay Act applies to employers of any size, and it allows workers to take their complaint straight to court, instead of filing first with the Equal Employment Opportunity Commission. Most important, under the Equal Pay Act, “the employee need not prove there is intentional discrimination going on,” Spiggle said. “She would just have to show the pay differential exists.”
Mind you, no one’s advising you to go running to court just yet. It’s time to ask the decision-makers why you are the only one taking a hit, and when or whether your original salary will be reinstated. If their explanation makes sense, you could ask for non-financial perks to offset the pay cut. If not, it might be “worth an hour with a lawyer” to discuss other options, Spiggle said. Even if federal laws don’t apply to your case, your state may have laws that do.
Discrimination isn’t necessarily a mustache-twirling, hand-rubbing plot to target women, seniors or any other group. But just because your employer doesn’t mean to discriminate doesn’t mean it’s not doing something illegal.
Miller writes a column answering questions about work dramas and traumas for the Washington Post.
Optimizing: After earning his law degree, he took a job at the business consulting firm McKinsey & Co. He started in 2000, just before the dot-com bubble burst. Before things soured, Sugarman worked on advising companies on how to grow; afterward, it was all about helping them cut costs and survive. He enjoyed the former more than the latter. “When people are cutting or optimizing, it’s not as creative and intellectually stimulating. It was less fun.”
Decision-maker: He wasn’t at McKinsey long before realizing the consulting world was not for him. He found himself spending much of his time not coming up with solutions to problems, but trying to persuade others that those solutions were the right ones. “I wanted to be on the decision-making side. It can be frustrating to spend more time politicking people to make a decision than actually solving issues.”
Sugarman shingle: In 2002, at age 27, he left McKinsey to start his own company, Sugarman Enterprises, which offered advisory services to small businesses. He brokered real estate deals, helped companies find investors, wrote contracts — you name it. He didn’t worry about going out on his own, even if it seems like a risky move. “My wife would probably remind me that we’d just gotten engaged, we were about to get married, we’d just bought a house and during the first year of the company we had our first kid.”
Whistle-stops: He closed his firm in 2004 and briefly worked as an investment advisor at Wall Street firm Lehman Bros., which later went bankrupt. He then co-founded an investment firm, GPS Partners, which grew quickly before crashing during the financial crisis. Sugarman said he wanted to go back to running his own company. “I was the junior partner in a two-man partnership. I aspired to have accountability.” In 2009, he started another investment firm, Cor Capital, which took a stake in the parent of Pacific Trust Bank, a San Diegoarea lender.
Investor to CEO: Sugarman joined the bank’s board in 2010 and in 2012 was named CEO. At the time, the bank had assets of less than $1.5 billion. Since then, the institution has changed its name to Banc of California, moved its headquarters to Irvine and grown its assets to more than $10 billion, in part by buying two smaller banks and acquiring the Southern California operations of Puerto Rican bank Popular. That deal gave Banc of California a foothold in Latino neighborhoods formerly served by Popular.
California focus: As the bank has grown, it’s signed a sponsorship deal with USC athletics, become the bank for the L.A. 2024 Olympic bid committee and has pledged to lend in areas not served by most lenders. Sugarman said the bank will continue to be an active player statewide. “Our goal is to be California’s bank. There’s nothing more clarifying than for our name to be Banc of California. Our mission is job creation in California and the communities where we live.”
Personal: Sugarman lives in West L.A. with his wife, Ainslie, a former attorney, and their three children, ages 7 to 11. They recently vacationed in Montana, as they do once or twice a year. “I sit on the porch, read something, do a little hiking and fishing. It’s nice to find some time to think.”