Be prepared to justify newcomer’s higher pay
If you decide to pay new hires more than employees with similar or better qualifications, be prepared to prove why you needed to sweeten the pot.
Otherwise, you could be risking an Equal Pay Act (EPA) lawsuit if an incumbent belongs to a protected class.
Recent case: HR manager Stephanie Sandor had 10 years of experience, a master’s degree and received stellar performance reviews. Then the company hired another HR manager—a previously unemployed man with 10 years of HR experience, but no college degree. It paid him the same for a four-day week as Sandor received for full-time work.
When the man was promoted and became her boss, Sandor quit—and filed an EPA lawsuit.
The court said her case could go forward because the employer could offer no good reason why it paid the man more than Sandor. That meant gender bias was a possibility. (Sandor v. Safe Horizon, No. 08-CV-4636, ED NY, 2011)