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Be ready to explain male/female pay differences

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in Compensation and Benefits,Performance Reviews

The Equal Pay Act (EPA) requires the same pay for women and men doing the same work under similar working conditions and requiring equal skill, effort and responsibility. But the law provides several ways for employers to defend pay disparities.

Wage differences can be justified if they are based on a seniority or merit system, or vary depending on the quantity or quality of production. In other words, employers must demonstrate that the difference is the result of factors other than sex.

EPA cases are hard for employees to win—as long as employers have clear policies in place that can explain the differences. It’s only when employers can’t explain the difference that employees gain the upper hand.

Recent case: Paulette Price and several other women sued their employer, Northern States Power Company, when they came to believe that male employees in their job classification were paid more than they were.

The company fought back with several explanations. First, it argued that a union contract dictated the beginning wages for all employees transferring into the position the women held. The contract set pay based on the amount employees earned at their prior assignment, even if the starting pay would otherwise be lower.

Second, the company explained that annual raises were determined by performance evaluation ratings. That, it said, explained growing differences in some of the paychecks, including those of several of the women who had started off earning more than some men, but ended up earning a bit less.

None of the women could point to a male co-worker who got the same performance evaluation score, but got a bigger raise than women with the same score. The court tossed out the case. (Price, et al., v. Northern States Power Company, No. 09-1921, DC MN, 2011)

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