Employers willing to trade salary reductions for remote or flexible work arrangements risk creating a fertile ground for overlapping wage-and-hour and anti-discrimination compliance challenges.
As companies revert to pre-pandemic policies requiring in-person, full-time attendance, they are exploring ways to meet increasing demand for flexibility, particularly from workers and job seekers who argue that strict in-office structures affect their health or productivity, management-side attorneys said.
New research indicates that these workers are in many cases willing to quit or accept a salary cut as a tradeoff for flexibility, which also allows them to avoid commuting costs and rising childcare expenses.
At the same time, the arrangement helps employers manage overhead costs, widen their hiring pool nationwide, and retain top talent, attorneys said. But there can be legal risks if those deals result in overtime-exempt salaries falling below mandatory requirements, or change the role enough to jeopardize classification altogether.
The slope is even more slippery if the application of a seemingly neutral policy results in protected groups like women, caregivers, and workers with disabilities—who are more likely to seek flexible schedules—being paid less for the same work, they said.
“I am telling employers that they have to look at this holistically. It’s not just whether someone takes a pay cut or not,” said Tracy Billows, a partner at management-side firm Seyfarth LLP. “You...
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