Federal Employment Laws That Impact Compensation and Benefits

Civil Rights Act

Title VII of the Civil Rights Act of 1964 makes it illegal to discriminate against a person based on race, color, religion, national origin, or sex. The Civil Rights Act of 1991 empowered individuals to claim punitive and compensatory damages. Punitive damage exposure can be managed with improved employment practices and ensuring that objective criteria are used in making employment-related decisions. At its passage, Congress enacted maximum limits to these damages.

The big picture for compensation

While EEO laws protect everyone, a useful way to view them in their entirety is to use the concept of protected groups. If compensation differentials exist between the majority of employees and members of protected groups, the employer must be prepared to justify them. All compensation policies, programs, and practices of an organization should be examined with the intent to ensure that no discrimination against protected groups has occurred or can occur. Hire, fire, and promotion processes that are effectively documented, objective, performance based and consistently applied become tools for promoting a transparent and open work environment versus a potentially litigious one.