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How Do Employers Avoid Ledbetter Problems

Last month, Kristen Shingleton, President of New Focus HR, wrote an article titled “Who is Lilly Ledbetter and How Does She Know President O’Bama?” (See the full article at www.newfocushr.com.)


This month Kristen outlines eleven helpful hints that will assist employers with avoiding Ledbetter problems. Remember, that the law does require “equity” and does not require “equality.” Equity can be audited much more effectively if a uniform process is followed:


  • Review document retention policies to ensure that all records relating to compensation decisions are kept long enough, if not forever.


  • Make sure that your company has systems in place for setting and reviewing all pay decisions.


  • Provide a written program for managers on how to set employee salaries at hire, and to grant promotional and merit increases.


  • All pay decisions should be well documented. Managers should document why certain employees receive higher or lower pay, benefits, or evaluations.


  • Implement a system to review compensation decisions for consistency and compliance with your compensation policies.


  • Consider having a compensation committee review all compensation decisions.


  • When setting “new hire” compensation, document all relevant factors, i.e. initial salary demands and negotiations, education and relevant work experience, salaries of similar situated employees, and economic relevant labor market at the time of hire.


  • Conduct regular/periodic performance evaluations.


  • Train managers/executives on how to conduct performance evaluations.


  • Require that each evaluator provide a narrative explanation of why specific ratings were given.


  • Ensure that merit pay increases are linked to a manager’s evaluation of their employee’s performance.


  • All pay decisions should be well documented. Managers should document why certain employees receive higher or lower pay, benefits, or evaluations.


  • Implement a system to review compensation decisions for consistency and compliance with your compensation policies.


  • Consider having a compensation committee review all compensation decisions.


  • When setting “new hire” compensation, document all relevant factors, i.e. initial salary demands and negotiations, education and relevant work experience, salaries of similar situated employees, and economic relevant labor market at the time of hire.


  • Conduct regular/periodic performance evaluations.


  • Train managers/executives on how to conduct performance evaluations.


  • Require that each evaluator provide a narrative explanation of why specific ratings were given.


  • Ensure that merit pay increases are linked to a manager’s evaluation of their employee’s performance.


While it is recommended that employers conduct an audit of their current practices, it should only be done if they are prepared to do something about the results. An audit would include an analysis to see if past pay decisions suggest pay differentials between similarly situated employees. It should include a look at pay at hire, merit raises, and raises resulting from job promotions or changes. For additional information on this topic, please contact New Focus HR.


Written By: Kristen Shingleton, M.B.A., CCP
President, New Focus HR LLC


New Focus HR



http://NewFocusHR.com








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New Focus HR is a human resources consulting and training company that services all organizations. Our expert team collaborates with businesses to attract, motivate, retrain and retain their biggest assets, employees. While engaged with an organization, our focus is to find solutions that improve the company’s internal HR-related practices while increasing results at the same time! Our focus. Your results.

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