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U.S. Equal Employment Opportunity Commission



Tips for Small Businesses

Pay Tips

Ensuring that managers involved in pay decisions understand their responsibilities may help prevent pay discrimination.

  • Ensure that managers who are involved in pay decisions understand their responsibilities related to making pay decisions, documenting those decisions and retaining relevant records.
  • Determine the criteria that you will use to make compensation decisions. Apply the criteria consistently.
    • Avoid basing pay solely on factors that may be discriminatory, such as prior salary. Instead, independently evaluate an individual's job-related qualifications.
  • Ensure that decisions regarding pay are not based on race, color, religion, sex (including pregnancy, sexual orientation, or gender identity), national origin, disability, age (40 or older) or genetic information (including family medical history).
  • Provide equal pay to male and female employees who perform the same work, unless you can justify a pay difference under the law.
  • Consider documenting decisions that affect pay. This includes decisions about starting pay; decisions about bonuses, raises or other pay adjustments; and other decisions that may affect pay, such as performance evaluations.
    • This may help you ensure that pay decisions are made consistently. It may also help you recall the reason(s) for a particular pay decision if a discrimination charge or complaint is filed.
  • Retain any payroll records for at least three years.
  • Retain any records (such as wage rates, performance evaluations, seniority and merit system information and collective bargaining agreements) that explain any pay differences between male and female employees for at least two years.

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