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Audit bonus payments to discover any gender discrimination

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in Compensation and Benefits,Human Resources

There’s a quick and easy way to determine whether your bonus payment program might be tainted by hidden sex discrimination in violation of either the federal Equal Pay Act or the New York Human Rights Law. Simply determine which employees performing the same job are eligible for the bonus, list them by sex, average the proposed bonuses for each sex and see which members of one sex will receive less than the opposite sex’s average.

For those who will receive less, check to see if there is a logical reason like seniority or lower produc­tivity. Then document it all in case of a later lawsuit.

Recent case: Walmart employee Amy was eligible for bonuses each year. She sued, alleging that men in her job classification were paid higher bonuses than she received.

Her lawsuit didn’t get far. A Walmart analysis showed that each year she claimed she was underpaid, she had actually received a bigger bonus than the average man in her classification. The court dismissed her claim. (DeJohn v. Wal-Mart Stores, No. 5:09-CV-01315, ND NY, 2013)

Final note: When it comes to pay, courts understand that many factors having nothing to do with discrimination go into determining how much individuals earn. The key is to document those reasons so you can explain your practices if challenged. Any factor other than sex is a legitimate reason for differences. Of course, the reason can’t be some other discriminatory factor like race or age.

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