My company is a family owned manufacturing business. The owner’s son manages the place while the owner has moved to another state. The son hires a friend of his and promises to pay him more than the set amount that entry level employees make. This friend had no prior experience to warrant being paid more, nor has the company ever paid any employee in this position more than another in this same position (as a starting pay). In the past, this boss has also hired all 5 of his children and paid them more than anyone else. Is this legal? Is it ethical? I’m stuck in the HR/ payroll position and feel like I should advise the owner, which of course will bring about problems with this boss, who is not my direct boss. What to do?
I am not a lawyer. I do not offer legal advice. I do not pretend to offer legal advice. I don’t even watch Law and Order any more, so I’m not even up on the nuances of NY criminal law. Not that this would matter in this situation.
Not being friends with the boss is not a protected class. This, in my way of thinking, means that you don’t have any claim of discrimination if the boss pays his BFF more than he is paying you, or rather the other entry level workers. You may see it as stupid, he may see it as being generous to an old friend.
Hiring your children is not illegal either. Nor would paying them more than other employees be anything less than expected. Is it stupid? Probably. (Although, I wonder if it would be illegal to pay them extreme amounts of money in an attempt to transfer assets to them without IRS problems. Hmmmm, too bad I’m not an accountant either.)
As you are probably already aware, salary information like this gets around very fast although no one is willing to admit that they said the boss’s friend/child is getting more money than everyone else. It ruins morale and if in addition to being overpaid, the boss’s friends and children aren’t stellar performers, it’s going to increase turnover.
So, this is why it matters to you. It doesn’t matter how much the boss pays someone or who he hires. (Does not matter. Does not matter. Repeat that.) It matters how the workplace is affected.
Should you go to the owner? Only if you regularly report to the owner. If not, then it’s a phone call out of the blue to say that sonny-boy is a screw up. They either already know or they are in denial, so what good will it do? You don’t even report to the boss, let alone his parents.
You should voice your concerns–to your boss. Your concerns are with employee morale, pay consistency and productivity. If the first and the last are not a concern–frequently people in family owned businesses expect the boss’s children/friends to be given special privileges and while they may grumble about it, it doesn’t really have an effect on performance–then don’t bother. Now, if clueless friend gets promoted out of an entry level job without proper qualifications, then as an HR person it is your responsibility to lay out the problems with this approach.
If you have a regular working relationship with Sonny you may mention your concerns about morale to him. He may think he’s a great guy who is helping people while you see him destroying the business. Now, if the owner happens to give you a call and ask what is going on, you can express your concerns, but don’t call them up.