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Stories in this issue: |
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Top talent: The bottom line Ten ideas for real recognition Playing by the rules Make compliance work for you Only the best Avoid the quick win quagmire |
| Playing by the rules |
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You have a hard-to-fill position, and when you interview qualified candidates, some negotiate above your offered salary and some don’t. While this may seem like a bargain, it can open you up to potential gender-, race-, and national-origin-based wage discrimination charges. The risk is increasing for a number of reasons, including:
Wage discrimination lawsuits can be incredibly complex and courts may not take past labor markets into consideration. Fortunately, a single act can keep you compliant: consistency. Before new hiring begins, examine your internal market. This is the most important benchmark for new-hire salaries. Understand why you’ve set the pay scale for the positions you need to fill so that you can fairly negotiate with potential employees. If a candidate argues for a higher wage, you need to be able to objectively determine if his or her offer is justifiable, and you need to carry this knowledge into every pay negotiation. While there is nothing illegal about setting a salary based on a candidate’s negotiating leverage, negotiations with all candidates must be consistent. If one candidate negotiates for a higher salary, all candidates must be allowed to negotiate. Allowing a single candidate’s education or particular qualifications to dictate a higher starting wage when those qualities are not required for the position also opens you up to legal action. If you prefer the position go to someone with a specific skill set, everyone who meets that particular qualification must treated in the same way; i.e., offering a lower salary to one of two equally matched candidates is legally actionable. Establishing consistent job requirements and skill preferences will help prevent this. As for relying on past salaries, the EEOC asserts that this could simply continue past wage discrimination. Exercise caution when considering past pay; if it’s below market, it could have been discriminatory and your continuation of that discriminatory salary can be challenged. In the past, employees had 180 days from the date that they agreed to their salaries to make a discrimination claim. This prevented a number of lawsuits, as many new employees do not share salary information within that time frame, if ever. But President Obama recently signed into law the Lilly Ledbetter Fair Pay Act, which resets the 180-day limitation with every discriminatory paycheck. New legislation also aims to prohibit employers from retaliating against employees who divulge salary information. It is important that your policies do not prohibit employees from sharing pay information and that they know that they are allowed to discuss salaries. Both this new legislation and the GAO report are influencing initiatives at the EEOC and the OFCCP. By establishing and following consistent hiring practices, you can avoid being the target of the increasing wave of wage-discrimination lawsuits. Workforce Management, October, 2008; updated February, 2009
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