Sometimes you have to sweeten the pay pot to attract highly qualified employees. But before you pay wildly dissimilar salaries to people in the same or similar positions, make sure you justify the differences.
There are two ways to do that. First, outline any significant differences in duties and responsibilities. Then consider the quantity and quality of experience each person brings. Someone with years of experience may be more valuable than someone who meets the minimum requirements, as might someone who worked for an industry leader or competitor.
Recent case: Jonath Nicholas, a black male, worked as an assistant women’s basketball coach at the University of Alabama at Birmingham. He learned that another assistant coach, a female, earned almost twice as much as he did. He charged race discrimination.
But the university pointed to a disparity in their experience and duties as justification for the woman’s larger paycheck. The female coach also had recruiting responsibility, which Nicholas did not. Plus, she had helped coach the University of Virginia women’s team to nine consecutive NCAA tournament appearances, while Nicholas had coached only at the community college level.
The 11th Circuit Court of Appeals dismissed the case because the university justified the differential. (Nicholas v. Board of Trustees of the University of Alabama, No. 06-14662, 11th Cir., 2007)
Final note: As backlash over last summer’s U.S. Supreme Court Ledbetter decision continues to grow, expect employees to pay more attention to perceived pay differentials. Employees—and their attorneys—now know they must sue right away. Plus, some lawmakers are pushing for legislation that would require employers to disclose salaries.