Is having unequal pay based on geographical territory, legal?
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Is having unequal pay based on geographical territory, legal?
I work for a national publicly held corporation. The company is managed by regions. I am in a sales position and our region (midwest) was recently put on a commission plan that is much less than the rest of the country. The job we perform is identical. I was curious is this is legal.
Asked on November 12, 2010 under Employment Labor Law, Ohio
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
Unfortunately, it is completely legal--even common. After all, the cost of living in different regions is different, as is the labor market. Companies will pay what they have to to attract the talent they want and motivate them appropriately--and no more. There is no law against regional pay differences; the only prohibited pay discrimiantion is on the basis of certain specifically ennumerated and protected categories, such as race, religion, sex, age over 40, or disability. Other than that, companies can pay whatever they like. For example: a publishing company I used to work for transferred a senior editor from Iowa to NYC. He kept the same title and responsibilities, but we immediately upped his pay from $40k to $60k per year to reflect the higher NYC cost of living and more competitive labor market. This sort of regional difference happens all the time.
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