ARE YOU VIOLATING THE LAW, INCREASING UNION VULNERABILITY AND WASTING PAYROLL DOLLARS?

Most employers, even during this economic period, must pay a competitive rate relative to the market place in order to attract quality people. However, once they are your employee, their attitudes are affected by the fairness of pay among jobs within the company. Thus, the concept of internal equity of pay will affect the company's exposure to discrimination lawsuits, union vulnerability, and productivity.

Properly managing pay is not a new phenomenon. However, with the recently passed pay discrimination law called the Ledbetter Act and the proposed Fair Pay Act of 2009, companies need to assess their compensation plans to avoid more law suits. Such an assessment will also help counter employee complaints regarding favoritism relative to pay which often can spark a union organizing attempt. Furthermore, a sound compensation plan will save the company money and increase productivity by paying jobs what they are truly worth relative to one another.

Various types of assessments can be done, but one that should occur is an objective analysis of internal equity of pay. Such an assessment will help companies address whether:

• The Marketing Assistant's job should be in the same pay range as the Engineering Assistant's;
• The Assembler's job should be paid the same, more or less than the Fork Lift Operator's; or
• The Production Supervisor’s job should be in the same pay grade as a Warehouse Supervisor.
  

The most common objective method of assessment is the point system job evaluation process. This process determines if jobs are paid fairly based on the required skills, responsibilities and working conditions of the job. This is not an individual performance evaluation and it is sex, age, race, etc. neutral. We have assisted companies in all types of industries evaluate jobs using such a procedure. This course of action helps companies avoid pay discrimination issues addressed by the Ledbetter Act. Equally important, it will reduce union vulnerability and help control labor costs.