As I write this, Obama has signed the so-called Ledbetter or Equal Pay Bill. For organizations, this law can represent a major challenge. Many organizations do not retain the records or the documentation that would allow them to respond to pay discrimination suits filed years after the act. Although there are some who would argue for the benefit of no records, I believe that the only real solution is more and better documentation. Companies shouldÂ collect and maintain information on the rationale for their pay decisions, including those at initial hire.
In addition, this does work against the movement in recent years to broader pay bands with wider managerial discretion. Â If managerial discretion is going to be allowed, the reasons for decisions should be recorded and justified. The other alternative is to move back to greater use of centralized pay decision mechanisms.