Law Doesn’t Recognize All Favoritism

Q: I was co-manager of a store where my supervisor, the district manager, clearly favored the other manager. My boss even admitted to me in the presence of the other manager that he favored the other manager because my boss had known him longer.

When someone discovered that $40,000 worth of merchandise was missing from the store, I was told that I could transfer to another unit of the same corporation at a substantial cut in pay, or that I would be terminated. There was no action taken against the other manager or the district manager, who also shared the responsibility of running the store.

I accepted the transfer, but feel I have been a target of discrimination. Do I have any legal recourse?

--K.W., Ventura

A: You claim to have been a victim of favoritism, but that kind of discrimination is not recognized by the law. State and federal laws prohibit discrimination on the basis of race, religious creed, color, national origin, ancestry, sex, sexual orientation, physical or mental disability, age (40 or older), marital status and other specified characteristics. An employer cannot favor one employee rather than another based on these factors.

You have recourse here if your employer has made a contractual commitment to demote employees only for cause and if you can prove the employer did not have cause to demote you. These kinds of contractual commitments are rare, though.

--Deborah C. Saxe

Management attorney

Heller Ehrman White & McAuliffe

Timely Forwarding of 401(k) Contributions

Q: The small business where I work makes deductions from my paycheck every two weeks for a 401(k) plan. I began these 401(k) contributions in July but noticed that the contributions weren’t actually credited to my 401(k) account until near the end of the year.

What are the rules regarding how quickly an employer must transfer 401(k) deductions to a 401(k) plan? What should I do to ensure a more timely transfer?

--S.C., Fullerton

A: I wouldn’t assume that your employer delayed forwarding your contributions simply because your account did not reflect the contributions until the end of the year. Many small plans only value the assets once annually, on the last day of the year.

It is possible, however, that the employer is actually holding onto the funds for a period of time before contributing them to the plan.

Employers are required by law to transmit the money to the plan no later than the 15th business day after the end of the month in which the amounts were withheld from employees’ paychecks.

If your employer cannot or will not demonstrate to you that the amounts were forwarded to the plan in a timely manner, you should consider seeking the assistance of the local office of the U.S. Department of Labor, which is in Pasadena.

--Kirk F. Maldonado

Employee benefits attorney

Riordan & McKinzie

Employer May Cut Pay and Add Duties

Q: Recently my manager informed me that my position fell under a newly imposed company salary cap. My manager went on to inform me that since my current salary exceeded this new cap, I will no longer receive any sort of raise as long as I stay in my current position. However, I’ve been given increased responsibilities that go beyond my initial job description. Can the company really cut costs in this manner? --S.S., Pasadena

A: Unless there is a contract or collective bargaining agreement to the contrary, an employer may freeze or even reduce salaries unilaterally.

An employer cannot take away compensation already earned, but it is free to change the terms of an employee’s future pay. An employer may also add job duties and responsibilities without a commensurate increase in pay.

You are free, of course, to leave your job and seek a better-paying one elsewhere. Or you can seek a promotion to a better-paying job within your company.

--James J. McDonald Jr.

Attorney, Fisher & Phillips

Labor law instructor, UC Irvine

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If you have a question about an on-the-job situation, please mail it to Shop Talk, Los Angeles Times, P.O. Box 2008, Costa Mesa, CA 92626, or e-mail it to shoptalk@latimes.com. Include your initials and hometown. The Shop Talk column is designed to answer questions of general interest. It should not be construed as legal advice.