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Feel free to set different pay rates, but prepare to document business reasons why

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in Discrimination and Harassment,Human Resources

Pay discrimination has received lots of attention lately, especially since the Lilly Ledbetter Fair Pay Act became law in January. Employees now have longer to sue over pay disparity.

What’s been lost in the news is that employers still have plenty of leeway in setting pay rates. And if they are prepared to offer solid business reasons why one employee earns less than another, chances are good a court will conclude the differentials aren’t discriminatory.

Recent case: Gerald Lloyd lost a leg in a motorcycle accident and wears a prosthesis. He worked as a truck driver for Swifty Transportation until he quit because of alleged harassment. He then filed a discrimination lawsuit, alleging he had been paid less than nondisabled drivers, even though he had more seniority over some drivers who earned more.

The company explained that it didn’t set its pay rates based strictly on seniority. Swifty pointed to its handbook to back up that claim. The handbook informed employees that pay rates were based on such factors as the profitability of the particular truck the driver uses, the efficiencies that each driver develops to boost deliveries, the individual’s performance and overall company profitability.

Lloyd couldn’t show that another truck driver without a disability was paid more after the additional factors were considered. The court dismissed his claim. (Lloyd v. Swifty Transportation, No. 07-1476, 7th Cir., 2009)

Final note: Document pay decisions when you make them so you can explain any differences later.

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