04 Sep Avoiding the Accusation of Gender Pay Discrimination
The Federal Equal Pay Act (EPA) has been on the books for almost a half a century. President Kennedy signed the legislation in 1963, but it hasn’t wiped out unequal pay — nor accusations about it. The Equal Employment Opportunity Commission (EEOC) has made a priority of rooting out pay discrimination, and is receptive to investigating claims.
Pay discrimination cases under the EPA must first be filed with the EEOC, which can easily be done without a lawyer, resulting in a high volume of claims. If the local EEOC office decides an employee has a solid case, you’ll be put on notice. You can dispute the finding and wait for the plaintiff to take you to court, but attorneys generally advise against allowing it to escalate to that level. One reason is that plaintiffs’ attorneys typically won’t represent a client until the EEOC has concluded she may indeed be a victim. Plaintiffs’ attorneys are often waiting in the wings to enter the fray at this stage — raising the stakes, and defense costs. (Note: Employees often can also file complaints with state authorities.)
Allowable Pay Discrepancies
Under the EPA, employers can pay different wages only if discrepancies are based on seniority, merit, quantity or quality of work produced, said attorney Regina Dinkes. Moreover, wages, she said, cover “the entirety of what an employee is paid, including bonuses, benefits and any other form of compensation” beyond basic cash compensation.
Typical employment scenarios that give rise to pay discrimination complaints, according to attorney Andria Ryan, include “a junior employee who works under a male employee asks herself, ‘Why am I doing all the work and he is paid more’?” Or a newly recruited male employee is brought in at a higher salary, triggering resentment among female employees. When specific complaints are voiced in such situations, take them seriously — regardless of whether they appear to have merit — to nip a potential legal action in the bud, Ryan said. “And if there is a problem, fix it.”
But you should not wait for a complaint or a notice from the EEOC to address the prospect of pay discrimination issues, employment attorneys point out. That means having written anti-discrimination policies and procedures in place, educating managers and other employees about them, and conducting regular wage audits to ensure that you are acting consistently with those policies.
Best Practices
Also, “it is a best practice to implement policies and procedures which require employees to report violations of the law to specified individuals, departments and/or an anonymous hotline,” Dinkes said. State that there will be no retaliation against anyone who reports a violation, and have employees acknowledge in writing that they understand all of the above, she added.
Periodically reviewing your payroll and patterns of raises (and written documentation of the rationale for pay change decisions) to look for any potentially discriminatory practices is more than a casual eyeballing exercise. You will also need to review promotion decisions in addition to simple changes in compensation. Note: Comparisons cannot be limited to workers with the same job title. “Equal work is determined by taking five factors into account,” said Dinkes: Skill, effort, responsibility, working conditions and the establishment.
If a periodic audit uncovers a potential case of discrimination, be sure to address the problem promptly. Doing so is not only the right thing on the merits, but critical from a legal liability perspective. That’s because if the problem winds up in litigation, pay audits are “discoverable” in the legal process. If it is revealed that you spotted a problem and failed to remedy it, you could face punitive damages on top of compensating the employee for being underpaid, warned Ryan.
Dinkes offered the following steps to take if you think you might be about to be sued for pay discrimination:
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- Review all pay documentation and related records and determine which employees may have a legitimate complaint.
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- Make a good faith effort to address any issues and mitigate damages.
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- Maintain open and good lines of communication with the complaining employee.
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- Do not become angry with the employee as this might expose you to the charge of retaliation.
Do not take any concrete action, such as terminating, disciplining, demoting, reducing the pay or hours of a complaining employee, as these also may be considered retaliatory acts.
Again, dealing promptly and completely with the issue is key. A complaint may seem like a molehill, but take it seriously, investigate it thoroughly, and if discrimination is found to exist, apply the right solution. Failing to follow through could turn that annoying molehill into a mountain of legal trouble.
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