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Ensure you can justify gender pay disparities

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in Compensation and Benefits,Discrimination and Harassment,Human Resources

There may be many reasons em­­ployees end up earning different salaries for similar work. Pay disparities often grow gradually, over time.

That can mean big trouble under the Equal Pay Act (EPA). If you aren’t tracking all pay changes and noting the reason, you may end up liable for sex discrimination.

Here’s why: The EPA is a strict liability law. That means that all the employee who is being paid less than a similar employee of the opposite sex has to prove is that her pay differs. That’s easy. The employer is liable unless it can demonstrate a good reason for the difference—one that is clearly a factor other than sex.

Recent case: Susan worked as a nurse at a university hospital and sued when she discovered that a male nurse doing substantially equal work under similar working conditions earned more than she did.

The university tried to argue that all it needed to show to win the case was that it had a legitimate, nondiscriminatory reason for the pay disparity.

The court disagreed. It said that under the EPA, the employer “can­­not escape liability merely by articulating a legitimate nondiscriminatory reason” for the difference.

Instead, the employer must “prove that the pay differential was based on a factor other than sex.” That’s hard to do without careful documentation of reasons for each employee’s pay increases. (Bauer v. Curators for the University of Missouri, No. 11-2758, 8th Cir., 2012)

Final note: How do you comply? Simply make a habit of justifying each pay increase with a factor like additional training or experience, higher productivity or a better performance rating. If you discover disparities you can’t explain, adjust everyone’s salary and move forward knowing you have a fresh starting point.

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