Passage of the Ledbetter Act — making it easier for employees to sue over claims of wage discrimination — has sent HR offices scurrying around to make sure they’ve retained every piece of paper associated with pay and promotions. That’s probably the wrong approach when building a defense against such claims.
The fact that the Ledbetter case involved a 20-year-long pay dispute has lead to the thinking that payroll and associated records have to be kept nearly forever. Of course it’s a good idea to keep comprehensive records, but –
- Pay records alone may not be the best defense against a bias claim, and
- Courts recognize that there’s a limit to the amount of recordkeeping companies can maintain, especially small companies.
So, what is the best defense against wage-bias claims? The attorneys at Fisher & Phillips recommend:
- Providing employees with a system to challenge wage decisions on the basis of discrimination. This will both help prevent discrimination as well as provide the employer with the ability to create a record at the time of the decision.
- Adding objective factors to the decisionmaking process that allow decisions to be defended. In other words, try to be sure that your process has defined measures — output, quality, etc. — for awarding pay raises and promotion. That’s better than just vaguely saying or writing, “You did a good job this year.” What’s a “good job”?
- Setting a baseline for all raises and requiring written documentation and review for any deviation from the baseline, up or down. If almost everyone gets, say, a 3% raise, what justifies some people getting more or less than that?
- Providing decisionmakers with forms that guide them in explaining their decisions. As much as possible, don’t leave it up to supervisors to be creative. Hand them the forms that meet your criteria.
Nothing will guarantee that your company will never be sued for wage discrimination. All you can do is set up the best system to prevent lawsuits and to defend yourself in case of a lawsuit.