Making pay decisions in light of the Ledbetter Fair Pay Act of 2007
In a recent communication about the Lilly Ledbetter Fair Pay Act, Purdue's Office of Institutional Equity advised all departments to document reasons for all decisions affecting employees' compensation, and to keep the documentation for an indeterminate period of time. In addition, it was indicated that all administrators and supervisors need to be able to explain their compensation decisions individually and also as they relate to groups of "similarly situated" employees.
As you may know, the Ledbetter Fair Pay Act has in essence removed any time limitations for employees to file pay discrimination claims. In addition, the Act has the potential to apply to all types of compensation decisions, such as start-up packages, merit increases, annual pay increases, and promotion and tenure.
So, we know we need to keep documentation and be prepared to explain ourselves. Of course, we want our documentation to demonstrate we've made appropriate pay decisions and not work against us. How do we go about this?
As a supervisor, you need to think about pay in terms of all the people you supervise. And your department needs to have an overall approach to managing everybody's pay.
One of the least desirable ways to manage pay decisions is on a case-by-case basis:
Starting with large organizational units at the University (offices reporting to the President; colleges; offices of Vice Presidents; regional campuses), leadership needs to get together and decide how they want to manage pay decisions. If representatives from all levels within the unit are involved, a standard can be set that everyone knows, understands, and can manage.
Clear criteria applied consistently
As your unit begins to collaborate and make joint decisions on managing pay, it will be important to develop a compensation philosophy to help guide specific pay decisions. A compensation philosophy defines employment situations when pay adjustments are likely to occur, and it establishes parameters for those adjustments.
Your HR department can help you develop a system, processes, and forms to manage pay decisions, and it can provide overall assistance with determining and communicating information about pay and pay adjustments.
Within the coming months, you can expect to see more information from Human Resources about performance management and how it relates to pay management.
For questions or comments, please call 49-47410.
- Deb Gardner, assistant director
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