A company hires two candidates for similar positions, one male and one female. The male candidate bargains to get a higher salary, while the woman accepts the original offer. The pay difference is legal, right? Not necessarily, according to a recent court ruling.

Companies are allowed to offer male and female employees different rates of pay as long as it’s due to a “reasonable factor other than sex,” according to the EEOC — such as prior experience, education and bargaining skills.

But the key: making sure salary negotiations are handled consistently. Many companies have been hit with lawsuits because of managers who were willing to bargain with one group of candidates and not another.

In one recent case, two women sued their employer because they were paid less than a male employee in the same position.

The company claimed the male employee received a higher salary because he negotiated for it. After he was hired, he told his manager he was offered two jobs at other companies and used those offers to bargain for a raise.

But the women won their case. Why?

They both tried the same strategy to negotiate for higher pay. The manager’s response: “We don’t play that game.”

Therefore, the court ruled, the company violated the Equal Pay Act by treating men and women differently when it came to salary negotiations. The company eventually settled the case for $180,000 (Cite: EEOC v. EGS Electrical Group, LLC).

Keep managers consistent

As this case shows, it’s up to HR to make sure all managers stick to consistent salary negotiation procedures.

Some more guidelines from the EEOC:

• Education, experience or training may justify a difference in pay — but only when they’re directly related to the job.
• Though some courts disagree, the EEOC states that prior salaries alone can’t justify a wage difference, because a woman may have been paid less in past jobs because of gender bias.
• Of course, the same rule of consistency applies to merit-based raises and other pay increases.

Tags: EEOC, Equal Pay Act, salary