Wednesday, July 16, 2008

Compensation Discrimination

According to the EEOC: Title VII of the Civil Rights Act, the Age Discrimination in Employment Act (ADEA), and the Americans with Disabilities Act (ADA) prohibit discrimination in "compensation" based on race, color, religion, sex, national origin, age, disability, or protected activity. The term "compensation" includes any payments made to, or on behalf of, an employee as remuneration for employment. Compensation discrimination in violation of Title VII, the ADEA, or the ADA can exist in a number of forms:

An employer pays employees inside a protected class less than similarly situated employees outside the protected class, and the employer's explanation (if any) does not satisfactorily account for the differential (e.g., Black workers make less than White workers in the same job/classification without cause);

An employer maintains a neutral compensation policy or practice that has an adverse impact on employees in a protected class and cannot be justified as job-related and consistent with business necessity (e.g., an employer claims there’s a non-race related job or business need that explains why White staff make more than Black staff and this reason is the cause of pay disparity, according to the employer);

An employer sets the pay for jobs predominantly held by protected class members below that suggested by the employer's job evaluation study, while the pay for jobs predominantly held by employees outside the protected class is consistent with the level suggested by the job evaluation study (e.g., Black workers are paid below the market rate and maybe below the minimum rate for positions predominately held by Black workers, while an employer properly pays or overcompensates White workers based on the market rates for their jobs);

A discriminatory compensation system has been discontinued, but salary disparities caused by the system have not been eradicated (e.g., pay disparities have been identified and the compensation system has been fixed, however the pay levels of the discriminated employees have not been properly adjusted to fix the errors identified in the pay system); or

The compensation of one or more employees in a protected class is artificially depressed because of a discriminatory employer practice that affects compensation, such as steering employees in a protected class to lower paid jobs than persons outside the class, or discriminating in promotions, performance appraisals, procedures for assigning work, or training opportunities. (e.g., manipulating performance evaluations, denying training opportunities and giving out menial assignments, etc. as a mechanism to underpay and stifle the pay of Black workers or keeping Black staff in lower paying jobs by not posting internal job vacancies, denying Black workers promotions, setting unequal, corruptible, and lax promotion criteria, having double-standards for promotions, denying transfers, etc. as a means of holding back the pay of Black workers).

There will be more on compensation discrimination tomorrow.


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