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A recent decision from a federal district court in Wisconsin is a great reminder of how important it is to follow legal compliance laws in compensation. 

Lenore O’Brien, a female employee began working for Unity Health Plans Insurance Corp. in May 2009 as a large-group account executive, for a salary of just over $67,000.  At around the same time, Unity also hired a male employee, Ryan Pelz, under the same job title as O’Brien but with a starting salary of $75,000.  Over the course of time, both O’Brien and Pelz received merit increases in base salary but because of the starting salary difference, O’Brien’s salary never matched Pelz’s.  In October 2014, O’Brien resigned from her position and sued the company for unequal pay under the Federal Equal Pay Act.

The court immediately denied a motion for summary judgement filed by Unity and noted that an Equal Pay Act plaintiff only needs to prove a few things: different wages paid to employees of the opposite sex, these employees performed equal work with equal skill and effort and the employees had similar working conditions.

Unity didn’t want to go down without a fight, of course.  The company argued that O’Brien was paid less because she had less experience than Pelz in selling group health insurance.  The court reviewed the terms of the job description for O’Brien and Pelz at the time of hiring and said the job description wasn’t detailed enough for Unity to make that kind of claim.  The court actually found that O’Brien and Pelz both matched the primary qualifications that had been spelled out in the description and ultimately favored O’Brien.

HR experts urge companies to use this case as an example of what to avoid.  Consistency and accuracy in HR-related records is imperative to avoiding, or at least limiting, legal liability.