Is Simpson Thacher & Bartlett's draconian policy illegal?
Simpson Thacher & Bartlett has implemented a new policy of docking pay by 20 per cent for associates who are ten days late in filing their time records. The policy does not allow the associate to recover the lost wages even after they have put their time sheets in order except in "exceptional and rare cases."
This article suggests that the firm’s hard line policy may be in breach of the law. A failure to follow company policies, according to one commentator, does not justify deductions from compensation under New York state law.
Simpson Thacher tries to avoid the statutory prohibition by making the salary reduction prospective, rather than retrospective – pay is set at a lower rate going forward, but the question is open as to whether a court would determine that the policy is defacto reduction.
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