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The Ledbetter Act: A Users' Guide
By Marc Tracy
Last week we discussed the first law that Barack Obama signed as president--the Lily Ledbetter Fair Pay Act. We were happy then, and we remain happy: the law fixes an illogical structural inhibition that prevented employees who were genuine victims of pay discrimination from suing their employers. Our hope is not that the Act will lead to more lawsuits, but rather to less pay discrimination; and we trust that the system will work in such a way as, ultimately, to bring that result about.
However, in the short term, there is no denying that the law may mean a few extra small headaches for the average business owner. As we say, we believe the goal is broad and important enough to justify these headaches, but they're still there, and what you--the average, decent small business owner who would never think of adjusting your employees' pay on the basis of anything other than skills, experience, and seniority--need to do now is to make sure you are fully in line with the letter of the new law, as you no doubt already are with its spirit.
To that end, Fortune has put together a brief compliance guide that we heartily recommend.
The basic idea is that you should be sure to look at your current compensation structure, as well as the compensations of all of your current employees, with fresh eyes. May even be worth getting a lawyer to do same.
A couple extra tips:
Why the disparity? Of course you shouldn't pay everyone the same. But make sure you can easily explain pay differences among your employees with reference to skills, seniority, experience, or other legitimate business reasons.
Institutionalize the law. That means training any underlings with hiring or interviewing power on what the rules are, it means updating any employee handbook you may have--basically taking steps to ensure that the spirit and letter of the new law is fully ingrained in your company and its employees.
Document, document, document. You absolutely cannot do too much paperwork regarding hirings, firings, intra-employee and employer-employee disputes, and anything else; and you simply can't keep it around long enough. Just remember: if you're doing nothing wrong, then your detailed notes of what transpired are your friend.
Comments (0)February 2, 2009 1:47 PM
