Most big companies have someone monitoring compensation, making sure that things are pretty much fair. But, sometimes, things fall through the cracks. And, unfortunately, sometimes the big boss doesn't care about fair, but just cares about paying people as little as possible.
You can't blame a business owner for wanting to make a profit. After all, times are tight for everyone, and if he can pay someone less, there's some logic to it. However, sometimes you may end up being the victim of this. One of my readers asked me the following question:
How do I go about getting paid fairly and my co workers. The company I work for is starting the new hires with less experience over $2. 50 more an hour. What can I do about this with out getting fired?
This isn't a small difference. For a full time job, that's more than $5,000 a year, which for almost all of us is a big deal. It is, of course, also a big deal to a business owner. That's a lot of cash and if there are 5 employees making the lower amount, he's saving a considerable amount of money.
So, how can you go about rectifying this? Well, first of all, you may not be able to. There is no law that requires fair pay. The law requires that you not pay people differently based on race, or gender, for example, but there is no law that prohibits you paying new hires more than long term employees. So, unless the long time employee are all over 40 while the ones are younger, or the new employees are one race and the long term employees are another race, there's no law to back you up.
The fact that the letter writer asked how to get more money without being fired, indicates to me that the boss is likely to be a jerk. People who have nice bosses don't write me asking how to ask a simple question about pay equity without getting fired. So, that alone may mean that the deck is stacked against the letter writer. But, here's what you can do.
Ask directly. Go to your boss and say, "I understand that new hires are making $12.50 an hour while I'm making $10. I've been here 2 years and my performance has always been excellent. What needs to happen to get my salary in line with the new people?" Honestly, in a company where you've just been overlooked, that is all that it may take. However, when that doesn't happen be prepared to be attacked with:
"Just how do you know how much the new hires are making?" Many managers hate it when their employees discuss salaries, and they'll try to make you feel like you've done something wrong. You haven't. Federal law makes it absolutely illegal for managers to prohibit you from discussing your salary with your co-workers. So, simply answer the question. "Jane told me, as is her right under federal law."
Be prepared, as this may make your boss angry. Rational bosses, no. Ones that you are afraid might fire you for asking, yes.
If the answer to your requested raise is a "No," you'll need to evaluate that no. Is it a "No, I do not want to give you a raise," or a "No, I don't have the authority to give you a raise."
If the answer is an "I don't want to," you may be completely out of luck, but if it's lack of authority it's not unusual. Your direct supervisor may have hire/fire capabilities over you, but few supervisors (even Vice President supervisors) can give a raise on her own accord. Money has to come from somewhere, and that usually requires a budget from finance and approval from HR as well. If the answer is no because your boss doesn't have the authority, then the next step is:
Enlist your boss as an ally. "I can't give you a raise, there's no money." Okay, fine, "Then who can authorize that?" and here is the key, get your boss on your side, "I know you value me as an employee, so who do we need to talk to to make this happen?" The "we" is deliberate, as is the positive approach that works in the assumption that the boss is on your side. The boss will let you know if he's not on your side at this point, but there's a good chance that the boss will take your side.
You can't just assume, though, that this conversation is the end of it. You'll need to follow up, and see how it's going. Raises cannot (generally) be done instantaneously, so it might take until the next cycle to get it done, even with the boss's support.
Consider that it's time to move on. A boss that is hiring new hires at a much higher salary than he's paying you either has a personal vendetta against you or is a cheapskate who only pays the bare minimum. If the current bare minimum is $2.50 more per hour than you're making, it means the competition is paying more as well. Sometimes the only way to get a raise is to leave. This is horrible and indicative of bad management, but plenty of companies operate like this. They know finding a new job is hard, and figure they can cheat you for a good long time before you'll leave.