Top 5 Strategies To Minimize Risk of Wage Discrimination Claims Based On Gender

by | Dec 24, 2018 | Blog

It’s rather easy for employers to create situations that seem to foster gender discrimination. To minimize the risk of discrimination claims based on gender, employers should conduct periodic audits of their compensation practices to determine if gender groups are treated differently, and if they are, to clarify that such disparities are based on legitimate non-gender-based factors and supported by objective documentation. We recommend the following five (5) strategies to employers to minimize the risk of wage discrimination claims based upon gender:

1. Have salary guidelines that are based on objective criteria such as education and skill level, going market rates, and performance level.

2. Have any merit, seniority, or productivity bonus, or commission programs in writing. The guidelines for the program should be clearly described. Training on the mechanics and logistics of the program should be provided to all employees whose salaries will be affected by the program.

3. Make a concerted effort to recruit and hire qualified candidates of both genders in every job classification, particularly those classifications that are normally dominated by a particular gender group.

4. Define any subjective elements of performance ratings, such as initiative, and provide concrete examples of what the element means. Similarly, when documenting a rating, offer concrete examples of employee behavior.

5. Document the reasons for any non-performance-based deviations from normal salary structures (e.g., sign-on bonus, etc.) in the affected employee’s compensation file at the time the deviation takes place. Employers should make sure to also date such documents at that time as contemporaneous documentation will generally be accepted as legitimate. Documentation made after the fact carries less impact and may be seen as falsification.

From gender-based discrimination to misclassification of employees to overtime, managers and supervisors are often clueless about the legal ramifications of these wage/hour issues. The best way to minimize the resulting liability exposure for companies along with the expensive litigation associated with the defense of these claims is for employers to train, train, train!