Resolving Employee Compensation Disputes

One of the most important tasks required of a business owner is to handle hiring, firing, and compensation matters with employees. When a problem arises it is necessary to take immediate action in resolving employee compensation disputes. Employee contentment is always a major concern, and wages are usually at the top of the list of issues to address. You can often prevent disagreements by putting proper policies and procedures in place.

Put a Compensation Policy in Place

A good way to help manage wages is to put a compensation policy in place. This type of policy helps managers and business owners treat every employee equally. The policy is applied to everyone who works in specific jobs or departments, which you can determine. Part of the compensation policy should define how and when raises are provided.

Employee Performance Evaluations

Part of an employee compensation plan must include job descriptions, expectations, and evaluations. Companies should utilize performance evaluations as part of the compensation plan. Ratings of a certain level should allow for compensation increases of a specific percentage or range. New employees may need to successfully complete a mandatory trial period before they qualify for a pay increase.

Resolving Disputes

Unfortunately, disputes with employees over compensation may happen from time to time. The key to resolving them is to listen to the employee before responding. Very often, employees simply want to be heard and may feel underappreciated. If the employee did not receive a raise because of substandard work, this must be communicated to the employee. If the company simply cannot provide an increase, although the employee deserves additional compensation there may be other options possible. For example, non-monetary rewards could be provided such as a vehicle allowance or stock options.

Getting Past a Disagreement

When a disagreement comes up it can create a difficult situation at work. The best solution is to resolve the dispute quickly but accurately. Remember that when you resolve the disagreement you will need to do it in a manner that is fair to other employees. Sometimes an employee dispute is escalated. These problems often require assistance from a knowledgeable attorney. When special circumstance arise, such as those involving union employees, arbitration or mediation may be necessary. Making decisions regarding employee compensation can be difficult. If you need help with a serious employee dispute, contact the experienced legal team at Udall Shumway PLC to discuss your case.

This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice regarding Employee Compensation Disputes, or any other commercial litigation matters, please feel free to contact Joel E. Sannes at 480.461.5307, or log on to,  or contact an attorney in your area. Udall Shumway PLC is located in Mesa, Arizona and is a full service law firm. We assist Individuals, families, businesses, schools and municipalities in Mesa and the Phoenix/East Valley.