Track rationale for all salary increases — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
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Employees who discover their colleagues are making more money for doing the same work often conclude that there can be only one reason—discrimination. Next stop: the office of an attorney, who will try to confirm the pay bias by comparing the disgruntled employee’s protected class status to those earning more.

Of course, everyone belongs to a protected class of one type or another, whether based on their age, sex, race, national origin and so forth. That means just about anyone can sue, alleging that discrimination is the reason for the disparity.

That’s why employers have to be proactive, consistently keeping good records that show why they make the pay decisions that they do. You can’t rely on remembering the reason several years from now.

Recent case: Leroy Hill, a black male, sued his former employer after he lost his job when a big project he was working on ended. He alleged that two co-workers, a white female and a white male, both performed the same job as he had, but had been paid more. Thus, he claimed race and sex discrimination in compensation.

The employer was ready with proof of why there was a pay disparity. It explained to the court that the white co-workers had come to their supervisors with job offers from other employers. To keep them, management raised their wages.

The court said that was proof that the pay differences weren’t based on sex or race. Hill had never sought more money after receiving an outside job offer; if he had, he might have received an increase, too. The court dismissed Hill’s suit. (Hill v. Emory University, et al., No. 09-10350, 11th Cir., 2009)

Final note: Make it routine to note the reason for every pay increase at the time the decision is made.

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