306 Ohio State Employees Just Lost Their Pay Raises. It Could Happen to You.
When a federal court recently overturned the Biden administration’s overtime rule, it didn’t just cancel overtime for millions of salaried workers. It also provided a pretext for employers to revoke pay raises that some workers had already received.
How does that work? The court decision that rolled out in November invalidated an overtime increase that was to go into effect on Jan. 1, 2025, as well as rolling back an earlier increase that took place in July. By the time of the rollback, some employers had already given workers raises to put their salary above the new overtime threshold. However, once the court tossed out the overtime rule, some employers decided to toss those raises as well.
For example, The Ohio State University gave 306 employees raises to move their pay above the overtime threshold on Nov. 1, only to revoke those raises a few weeks later after the court decision.
The pay reversion will go into effect Jan. 1, the university announced. But workers were understandably less than grateful for the temporary bump.
One of those employees, an administrative staffer who asked not to be identified by name out of fear of retaliation, described the move as "a punch in the gut."
The employee, who oversees 130 student workers, had gotten a salary bump from $55,100 to $58,700, just above the new salary threshold.
By rescinding the raise, this employee said, Ohio State had sent a discouraging message: "We don't value you. What you're doing is not worth the increase."
NPR further notes that the total cost of pay raises to those 306 employees equaled about $2 million out of a budget of $10 billion. Ohio State’s football coach earns total compensation of more than $10 million per year.
Honestly, the only mystery in this story is why Ohio State thought it was worth the bad PR to save 0.02% of its budget. But it doesn’t take a court decision to cost employees pay raises.
Most of the time, companies can revoke pay raises for any reason, provided that it’s not discriminatory. (And discriminatory is narrowly defined. To qualify, your employer would have to discriminate based on a protected characteristic such as race, color, sex, age over 40, disability, etc.)
That’s because, in every U.S. state except Montana, workers are considered employed at will unless otherwise specified by an employment contract. In practice, this means that if you live in one of 49 U.S. states and aren’t covered by a collective bargaining agreement through a union, your boss can fire you at any time, for any (non-discriminatory) reason. Further, they can reduce your hours, pay, or benefits, often without notice or justification.
In short, Ohio State’s decision to cancel raises reminds us of something that we should all keep in mind: employment law in the U.S. is set up to favor employers, not workers. Even if you’re lucky enough to have a job you love, it’s worth remembering that the company isn’t on your side. Be loyal to yourself and your career and keep your resume up-to-date.
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Great points made. Employers are exposing their culture.