Can an employer pay some employees at full rate and others at a partial rate?

UPDATED: Oct 1, 2022

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

UPDATED: Oct 1, 2022Fact Checked

Get Legal Help Today

Compare Quotes From Top Companies and Save

secured lock Secured with SHA-256 Encryption

Can an employer pay some employees at full rate and others at a partial rate?

I work for a young, pre-revenue company. After the company raised money, the CEO started paying employees but paid some employees their agreed to salary and others at a percentage of their salary. The company’s employment agreement says that the company can pay based on available capital and revenues but is it legal to pay some employees their full salary while paying others only a percentage of their salary?

Asked on September 18, 2017 under Employment Labor Law, Ohio


M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

So long as the terms of any applicable employment contract (or union agreement) is not being violated, then compensating employees differently is legal. That is so long as it does not constitute some form of legally actionable discrimination. In other words, differing or less favorable treatment cannot be based on a worker's race, religion, age (over 40), disability, nationality, etc. Otherwise, not all employess need be treated the same or even fairly.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption