Human Resources: Best Practices To Avoid Paycheck Fairness Litigation

business_woman_suit_frontHuman resources and fair pay for equal work… What does it mean to employees when there is a huge discrepancy in pay between genders?  Is this illegal?

Recently, The Paycheck Fairness Act was stalled in Congress. Bill  3228 contains language that essentially precludes employers from retaliation if employees question pay disparities.   The act also enables punitive damage awards against employers if there is found to be discrpacies in pay levels between male and female workers.

In 2009, the Lilly Ledbetter paycheck law expanded filing for equality of paychecks and reformed the statute of limitations for these claims.

Whether the legislation would open up compensation and employment decisions to litigation was part of the reason for the filibuster, which seemed to garner support along party lines.  The opponents of the bill felt that it creates an undue burden for employers and opens them up to lengthy litigation, while proponents stated that women breadwinners are entitled to equal pay.

Whether the courts should become more involved in businesses and business employment decisions seems to be at the crux of the matter, since it appears both parties believe in parity for merit.

The best case is to avoid litigation.  Here are some best employment practices to have in place:

  • Have employee guidelines that clearly delineate the opportunities for merit increases or promotion increases.
  • Have annual performance evaluations and a process for fairly issuing pay increases or decreases that is consistently enforced can help to justify pay variances.
  • Have a written compensation package that shares the salary guidelines and requirements for each position.

When employees are upset, it’s incredibly helpful to have a clear guide to point to that takes the emotion out of the situation.

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