Do you sometimes offer new employees different salaries for the same positions? If so, be sure you document why one applicant is worth more than another.
If you don’t, you may find yourself on the losing end of a lawsuit later, especially if you end up discharging an employee who received a lower salary offer and he can point to employees outside his protected class who received higher offers.
Recent case: When Aaron, who is black, was hired as a consultant for Magic Hat, he was offered $50,000 per year, plus commissions. Later, when he failed to make sales, he was discharged for.
He sued, alleging that Magic Hat had underpaid him because he is black. He pointed to a white consultant who had been making $100,000, plus commissions, for the same job. This, he contended, was race discrimination.
The court agreed that such a large salary differential was prima facie evidence of discrimination.
That shifted the burden to Magic Hat to prove a reason other than race to explain the difference. But the company was prepared. It explained exactly how it determined starting salaries. In Aaron’s case, his previous experience was far less extensive than that of his white co-worker. Plus, prior sales history showed the white consultant had sold far more than Aaron. That was enough for the court to dismiss the case. (Mongo v. Magic Hat, No. 14-5433, ED PA, 2015)
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