Marc A. Mandelman, Member of the Firm in the Employment, Labor & Workforce Management practice, in the firm’s New York office, was quoted in Law360 Employment Authority, in “New Pay Laws Put Onus on Employers to Explain Salaries,” by Amanda Ottaway. (Read the full version – subscription required.)

Following is an excerpt:

New pay transparency laws in places like California and New York City will lead to scores of workers for the first time having information about how much others get paid, opening up new conversations — and potential litigation — that experts say employers should be prepared for. …

Conducting pay audits, reviewing their job classifications, and analyzing distinctions between different job levels and pay categories are key steps, management side attorneys said.

"I think an employer would be ill-advised to disregard an employee raising a concern about whether or not their pay is in line with the market, or whether they're being underpaid," said Marc Mandelman, an Epstein Becker Green member in New York.

One scenario employers should anticipate is a current employee coming to their manager and asking why they make below the posted range, or in the bottom portion of the range, for a listed job that's similar or identical to theirs.

Mandelman also urged employers to use pay transparency conversations as an opportunity to take a look at and potentially adjust current employees' pay, even bringing it more in line with what they offer new hires. …

If workers determine the going rate for their skills is higher than they're paid in their current role, they could bounce for a better-paying gig — or threaten to leave unless their current employer matches it, Mandelman noted.

"Employers need to be prepared to understand why there are differences and be prepared to explain those differences to an employee who raises a question, and if it's appropriate, use this as an opportunity to identify differences that might need to be addressed," Mandelman said. …

Mandelman said he anticipates that salary information gleaned by workers will be used in equal pay litigation, a likelihood employers need to be mindful of.

"The employer is going to really need to be prepared to respond to that, and be in a position to know whether or not there is a problem" for which they could be liable, he said.

For example, if an employer in the current inflation-wracked economy wants to bring in workers at a higher pay rate, but most of those new hires are of a similar gender or race, that could open up the company to pay discrimination claims, Mandelman said.

"The law provides employees with sort of readily available information that they may use to raise a question as to whether or not their pay is outside of an appropriate range," he said.

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