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Year-old pay comparisons can show bias

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in Compensation and Benefits,Human Resources

Carol Broadus did it all, from building computers to training employees to fixing problems, all for an hourly rate that equaled about $22,000 a year. But within a year of Broadus' departure, a man she had hired and trained to do a job similar to hers was earning more than $27,000 a year, and two other men hired later to perform work substantially equal to what Broadus had done were paid much more than she ever received.Realizing this disparity, Broadus sued under the Equal Pay Act. The company argued that it was unfair to compare her pay to that of successors who didn't follow her immediately.

But a federal court sided with Broadus, awarding her $28,808 in back pay and punitive damages. It said the comparison was fair because Broadus had been in a newly created position, making it impossible to compare her pay with that of a predecessor. Also, the men who held these jobs later performed essentially equal work. (Broadus v. O.K. Industries Inc., No. 99-1529, 8th Cir., 2000)

Advice: In this tight labor market, companies are often forced to ratchet up salaries, especially for tech workers. So it seems unfair that a worker could sue you for unequal pay by comparing her salary to that of a person who performed her duties a full year after she quit. But that's what happened here, and it gives you even more reason to review your compensation structure regularly for inequality. Scrutinize salary and benefits for signs of race and sex bias in the same way a jury would.

You're not completely hamstrung. While you can never base pay on gender, you always have the right to pay workers differently if you can point to different levels of responsibility, workload, experience or working conditions.

If you need to equalize pay, it's illegal to decrease the salaries of male workers. In other words, "correcting a disparity in pay" always means giving a raise.

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