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Audit pay averages for women and men to learn if you’re at risk for pay-bias suit

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in Compensation and Benefits,Human Resources

Pay disparities between men and women are in the news. (See “Obama signs Ledbetter Act, easing path for pay-bias suits.”) Here’s how to find out whether you’re in danger of being sued: Take all your employees working in the same classification, divide them into male and female groups and then determine each sex’s average salary.

If there is little difference, an employee will have a hard time arguing his pay is discriminatory. That’s because employees have to show not just that they’re being underpaid compared to a similarly situated person of the opposite sex, but also that there is a disparity when you compare all males and females in the job classification.

Recent case:
Benjamin Mahan worked for the Department of Veteran Affairs as an addiction counselor. When a female addiction counselor was transferred in, he found out she was being paid one step higher on the pay scale. He sued, alleging Equal Pay Act violations.

But the court tossed out his case because he hadn’t looked at all male and female addiction counselors in his office to see whether, on average, there was a difference between their salaries. That meant he never got beyond the first litigation step—and that his case could go no further. (Mahan v. Peake, No. 07-15233, ED MI, 2009)

Final note:
Even if your informal audit shows pay differences for males and females, that doesn’t necessarily mean you’re discriminating. You can justify differences by considering such other factors as prior experience, high performance and seniority.

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