Agenda: Compensation: Avoiding Antitrust Violations

Careful HR generalists and compensation professionals know that the use of salary surveys—and, indeed, conversations about salary levels with peers in other organizations—can violate the Sherman Antitrust Act. Employers cannot act in a way that could be interpreted as trying to “fix” salaries at certain levels.

The U.S. Justice Department has published Antitrust Safety Zone guidelines on how employers can exchange salary data and information without running afoul of the law. Originally developed for the health care industry, these guidelines now apply to all employers and require the following conditions:

• Compensation surveys must be managed by a third party. HR professionals cannot conduct formal or informal salary surveys on their own.
• Data must be more than 3 months old.
• All of the salary data employers use must be derived from at least five entities, and no individual entity can represent more than 25 percent of the data. Any information disseminated must be aggregated so recipients cannot identify the compensation paid by a particular organization.

When in doubt, HR professionals should check with legal counsel to find out what they can and cannot do when it comes to compensation data and information sharing.

The author is a New Jersey-based business and financial writer.