Equal Pay bias can cause a gender discrimination lawsuit if you cant explain why.

by on January 7, 2009 · 0 Comment POSTED IN: HR Info Center

Guilty of Equal Pay bias

When was the last time you audited your firm’s compensation practices to ensure no gender discrimination thru pay bias?

After the DOL conducted its own review of Wachovia Corporation, it determined the banking giant’s pay scale favored male employees.

The feds filed a gender discrimination case and the bank settled. It agreed to pay over $5 million to 2,021 current and former employees.

Too bad this employer didn’t police itself before the government jumped in and did the job.

Cite: DOL v. Wachovia Corporation.

Male paid more

You may legally pay a man more than a woman for a comparable job – if you can show a business reason.

A salesman who brings in five times more than a saleswoman deserves more money – because he’s a better salesperson, not because he’s a guy.

But a TV shopping network couldn’t show a court any numbers behind its decision to pay a male host substantially more than his female counterpart. The jury came back with a $68,000 verdict in the pay bias lawsuit against the employer.

Cite: Owens v. QVC.

Watch out! Equal Pay discrimination suits on the rise

Proactive planning helps employers address gaps in pay

Recent verdicts to keep you up at night: A Nebraska power company paid $105,596 to a female clerk who assumed a retired male supervisor’s duties without getting a raise.

AMEX Financial Advisors agreed to pay $31 million to settle a gender discrimination suit alleging that female workers were paid less and had fewer job opportunities than males.

And SuperValu Holdings coughed up $1.2 million to settle EEOC gender discrimination cases that it paid women less than men for equal work.

Find A Business Justification

Salary expert Stephen Kellerman confirms that courts are increasingly willing to slam employers in pay bias disputes and suggests ways companies can steer clear of trouble.

The key, says Kellerman, is to make sure you have “reasonable business justification” for pay disparities. If you can prove a pay difference is due to market demand, seniority or job complexity, you should be okay.

Kellerman recommends reviewing all jobs and salaries across your company by gender, ethnicity and other protected characteristics. Have you enlarged a woman’s job without increasing her pay? Asked an ethnic minority to take over a higher-paid person’s job without giving him a raise? If so, you could be vulnerable. Eliminate the disparities and avoid costly lawsuits.

Source: Stephen H. Kellerman, SPHR

Seniority didn’t explain pay bias

If you award pay raises based on seniority, make sure they actually correspond to length of service.

An employer in Iowa didn’t, and faces trial in a gender discrimination lawsuit.

A female supervisor said she made less than seven men with similar duties. The employer said seniority explained this. But the court said it didn’t: Three of the men had less supervisory experience than she did.

Cite: Griffiths v. Winnebago Industries

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