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Root out unintentional pay discrimination

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in Employee Benefits Program,Human Resources

Here’s yet another good reason to closely review employee compensation: Legislation overturning the U.S. Supreme Court decision in the Lilly Ledbetter case has been enacted. (See "Obama signs Ledbetter Act, easing path for pay-bias suits.")

Employees will now be able to sue their employers for any discriminatory pay decisions made years ago that still show up in current paychecks.

Employers that take a close look at pay disparities now (and fix any problems) may be able to prevent or short-circuit the inevitable lawsuits.

Advice: Conduct a self-audit to find out whether you’re unintentionally paying less to members of one gender, race or other protected class for doing the same job.

Having that information at hand will also help you if you’re currently being sued. It should make it easy to prove that it’s simply not true that you’re paying someone less because of his membership in a protected class.

Recent case: Elton Taylor, who is black, worked for UPS until his recent retirement. He sued the company, alleging that he had been paid less than white counterparts.

Taylor hired a statistician who used a mathematical model to show that blacks holding the same positions with similar experience and education were paid less than whites as a group. He also compared Taylor to two specific white employees who did the same job and had similar experience and found that Taylor had been paid less.

That was enough for the 5th Circuit Court of Appeals to authorize a jury trial. (Taylor v. UPS, No. 07-31000, 5th Cir., 2008)

Final note: Don’t be blindsided by statistics. Do your own audit and fix any apparent problems. The Lilly Ledbetter Pay Equity Act will almost certainly open the floodgates.

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