Lilly Ledbetter Fair Pay Act Revisited

I wrote this back in February but never posted it because I thought the topic had been covered enough by others.  Then on Thursday I attended a luncheon put on by the Rocky Mountain Compensation Association, our local Colorado WorldatWork affiliate, and listened to attorney Josh Kirkpatrick from Littler discuss the law and decided it was ripe for another post.  (I also had the distinct pleasure of meeting Terri Albee in person, and she's as great as her blogs would indicate!)

I’ll be the first to admit that the idea that someone can come into my office tomorrow and claim that their paycheck is discriminatory because of a decision made 20 years ago by a supervisor who is long gone, is a bit frightening.  But if we do our part as Compensation and HR professionals, we can mitigate some of the risks associated with this amendment to the various fair pay laws.

1. Put a record retention policy in place so that you have documentation in the event of a discrimination claim.  One very interesting idea I came away with from the presentation was that your record keeping response should be company specific.  If you have records that show a pay disparity with no explanation for why the decision was made, don’t keep them any longer than you are legally required to because they could actually work against you.  If your records clearly explain the pay decisions, then keep them until the individual is no longer employed (plus 300 or 180 days).

2. Make sure all pay documentation going forward clearly states the business reasons for the pay decision.

3. Fix any problems you have now.  Working with an attorney, perform an audit of your system to identify any issues that may exist.  It would be infinitely better if you discovered an issue and addressed it before it turned into a claim. 

4. Most importantly, train your managers on how to make pay decisions.  They should only be considering job-related factors when making a pay decision.  For example, Joe shouldn’t get a higher starting salary than Sally (if she has the same level of experience and is going into the same job) just because he’s married and has kids to support while Sally is single.  Managers can think they’re being the good guy and being more “human”, make sure they understand that a jury would think they’re discriminating against women.  (Added bonus - this training can actually apply to pretty much any employment decision.)

The Lilly Ledbetter Fair Pay Act isn’t the way I would have addressed pay equity if I had been the one writing the law, but panic isn’t the right response.  Thinking through the implications and how we can make sure our businesses are paying fairly and won’t end up getting sued is the best way to respond to the passage of this new law.

Darcy Dees works as the Compensation Manager for Rock Bottom Restaurants, Inc., headquartered in Louisville, CO.  She has been working in Compensation for over 5 years now and recently attained her Certified Compensation Professional (CCP) designation.  She spends what little free time she has hiking and reading.

Comments

[working girl]

Joe may just be a better negotiator than Sally and take longer to get to yes because he's got a great job at a competitor and Sally is unemployed. But a policy of thinking about pay decisions and documenting them isn't all wrong. And maybe women will finally earn more than men! ;-)