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Solid salary plan beats equal pay lawsuits

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in Compensation and Benefits,Discrimination and Harassment,Human Resources

If you haven’t looked carefully at how you determine compensation, here is another reason to do so soon. Employers that can show a court they set salaries based on logical, fair and unbiased factors are likely to win Equal Pay Act (EPA) lawsuits.

That’s because the EPA outlaws sex discrimination in pay, but allows employers to use factors other than sex to set pay rates. Employers that can explain those factors are likely to win lawsuits—even if the female employee who challenges the pay plan is making less than males in different positions.

Recent case: Regina Gresham worked as the director of parks and recreation for a city until the new mayor demoted her. The mayor claimed that he received complaints about her work. Before the demotion took effect, Gresham asked for a hearing. The city appointed an outside attorney to conduct the hearing, and he concluded she deserved the demotion.

That’s when Gresham filed an EPA complaint. In it, she claimed that she had been paid less in her job as a department director than other city directors.

The city shot back with facts. The personnel director explained to the court how the city set salaries. The plan had been created back in 1986 by consultants from Auburn University. Each position had a salary grade based on such factors as job duties, responsibilities and educational requirements.

Everyone promoted into a director position started at the first step for that position and could advance through several grades. The personnel director explained that some male directors made less than some female directors, but that it was based on the specific person and position, and not gender.

Gresham had no figures to counter the city. She lost the case. (Gresham v. City of Florence, No. 08-14625, 11th Cir., 2009)

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