How to Avoid Being Sued for Gender Discrimination in Compensating Employees

Federal law prohibits gender discrimination by employers. The prohibition applies not only to hiring and termination decisions, but also to decisions regarding employee compensation. In the absence of distinguishing qualifications or other non-discriminatory justifying factors, an employer must pay male and female employees the same for equal work. There are a variety of factors that can justify disparate rates of pay. Differences in job duties and responsibilities, greater experience levels and superior work performance are examples of legitimate, non-discriminatory considerations that can justify higher pay rates. In order to justify pay disparities on such bases, an employer must take precautions to avoid inconsistencies in applying and documenting the relevant criteria.

Difficulty: Moderate

Instructions

Things You'll Need:

• Consistent system for employee evaluations
• Accurately maintained personnel files

1. Emphasize in written job descriptions that any listed qualifications are minimal in nature and that starting compensation will be based on a variety of factors, including professional background and experience.

2. When evaluating performance of individual employees, clearly document performance strengths and weaknesses that account for compensation adjustment decisions.

3. Strictly enforce a policy that prohibits employees from discussing compensation rates with others.

4. Periodically review compensation levels of similarly situated employees within a given unit or department. Ensure that any wide pay disparities between male and female employees can be explained with well articulated rationales.

Tips & Warnings

• Always document employee weaknesses and areas for improvement in written performance evaluations. Otherwise, when the performance deficiency is offered in defense of a pay discrimination claim, the employee will argue that the deficiency did not in fact exist.
• Ensure that compensation criteria are evenly applied. If, for example, a male employee is paid more than a similarly situated female because of prior experience, it is important for other experienced employees to be similarly rewarded for their prior levels of experience.
• When possible, have both male and female supervisors determine employee compensation rates. It is very difficult for an employee to prevail on a discrimination claim when the decision at issue is made, at least in part, by a member of the same protected classification.
• Federal law prohibits an employer from punishing or retaliating against an employee for complaining of perceived discrimination. If such a complaint is made, the employer should investigate the issue without taking adverse employment action against the employee.

Resources

• EEOC