Mandatory Pay Gap Reporting in the U.K.

pay gap reporting

Since 2017, large employers in the U.K. have been required to calculate and submit statistics on gender pay gaps among their employees. This requirement covers all classes of employers - private, public, and charitable - and must incorporate data on all employees present on a “snapshot date”: March 31 for public employers, and April 5 for private employers. These data are then reported both on the individual employers’ websites and to the Government Equalities Office.

While the required calculation of the pay gap statistics is highly proscribed, employers are free to compute and publish the data any time in the year following the “snapshot” date (in late March or early April) up until the following year’s snapshot date. It can be interesting to observe individual firms’ decisions of when to submit their findings to the government; what we have found is that most firms wait until the “last minute” to report on their gender pay gaps.

Days before deadlineIn the reporting year that spanned April 2018 through March 2019, we found that only 1,425 firms - representing 13 percent of all relevant employers - had reported their pay-gap findings by February 28, 2019. The other 87 percent of the reports were filed within a month of the April 2019 deadline. Even more surprisingly, 56 percent were filed within one week of the deadline, and 32 percent of reports were submitted within a mere two days of the deadline.

In view of the high percentage of firms that opted to delay their reporting, Welch Consulting has become interested in several questions: How do pay gaps among firms reporting early this year look compared to those reporting early last year? How did last year’s early reporting firms’ pay-gap data compare to the final average pay gaps, once the latest reporting firms had submitted their data? And, lastly, what do we expect for this year’s final results?

Studying data trends and differences between the early and late reporters has made Welch Consulting well-equipped to assist your firm in collecting pay-gap data, eliminating errors, and ultimately reporting these figures. Moreover, Welch Consulting can also help provide additional facts and analyses to strengthen a “supporting narrative” that the employer may choose to publish alongside the required numbers. A supporting narrative may help put a reported pay gap into context, and clarify that these data do not provide conclusive evidence that the employer engages in discriminatory behavior.

Findings in the 2018-2019 Reporting Year

For the 2018-2019 reporting year, the overall average pay gap was 14.2 percent. That means British men at the reporting firms earned an average of 14.2 percent more than women at the same firms. Employers reporting early tended to look a bit better: Those submitting numbers by February 28, 2019, had an average gender pay gap of 13.0 percent--1.2 percent lower than the final average.

Findings in the 2019-2020 Reporting Year

Almost 1400 firms have reported numbers for this year as of the end of February. This is similar to the prior year’s 1425; it is likely that the percentage of employers reporting early will be similar to that of the prior year as well. Among this year’s early-reporting employers, we find an average pay gap of 12.4 percent.

If the 1.2 percent difference between the early-stage and final-stage reporting that we found last year holds steady for this year, then we can expect to see a final average pay gap of 13.6 percent this year. If that figure actually comes to pass, we would see the pay gap decrease 0.6 percentage points from the 2018-2019 reporting year to the present, a small change.

Further analysis of these numbers from the last few years reveals a similar finding. When we put 2018-2019 and 2019-2020 figures for the same employers side-by-side (for those that have reported to date for the 2019-2020 period), we see that 54 percent of those firms report a smaller pay gap than last year’s, 41 percent report a larger pay gap than last year’s, and 4 percent report the same pay gap. The finding that a majority of firms reporting so far this year have reduced their pay gap relative to the prior year’s gap is consistent with the above-forecasted decrease in the final pay gap.

Our Labor Economists Can Help

The 2019-2020 pay-gap reporting season is almost at a close. But, in one month’s time, the next year’s season will open up, allowing employers throughout the United Kingdom to begin collecting their data and submitting it to the government well ahead of schedule. Welch Consulting can help. We will work with your firm to gather the required data efficiently and without error, ensure all calculations are accurate and report your findings to the British government. Additionally, we can help shape the “supporting narrative” that employers are allowed to publish with their numbers. We can support the development of this narrative through additional studies that more fully describe gender pay differences when measured among more appropriate comparison groups, or by taking into account factors heretofore ignored by the required reporting statistics. Our labor economists have worked on U.K. pay gap reporting since the 2017 mandate went into effect; they have the necessary skills to get this task done accurately and professionally.

Contact us to learn more about our labor economists and all the services we provide.


EEOC’s Top Six Reported Employment Discrimination Charges - Part I

Employment discrimination claims encompass a variety of alleged illegal behaviors that, if successfully prosecuted in court, can result in tens of thousands (or even millions) of dollars in economic damages, as reported by the federal government’s Equal Employment Opportunity Commission (EEOC). Welch Consulting is a national leader in analyzing labor and employment discrimination claims; our experts have years of experience defending major employment discrimination charges that are brought against employers throughout the United States.

In the interest of educating our clients (and whoever else may be interested in learning more about this topic), Welch Consulting has compiled a list of the top categories of employment discrimination and related claims among the 72,675 charges of workplace discrimination reported to the EEOC in Fiscal Year 2019. In this article, we examine the three largest claim areas, and in a future article, will discuss the fourth through sixth most recently-published tabulations of discriminatory complaints.


As of FY 2019 reported data, retaliation claims tied to alleged discrimination were the most- reported type of discrimination charge, with about 39,110 instances, comprising 53.8% of all charges. Retaliation claims can be related to any form of earlier acts of alleged discrimination; most frequently--due to workplace circumstances specific to immediate supervisors, or persons charged with enforcing company policies--claims are individual in nature (rather than involving class-wide claims).

It is against federal law for an employer, or any agent acting for an employer, to retaliate against an employee for complaining about alleged unfair treatment that he or she believes stems from discrimination in the workplace, whether that complaint relates to an employee’s race, gender, age, national origin, or any other characteristic protected under the law. Any employer action that follows soon after an employee’s original complaint and that appears punitive, or to adversely impact the employee’s career, may sow the seeds of a future retaliation complaint.

Employers must be circumspect when deciding to alter an employee’s career path when the employee has earlier reported that he or she has been the victim of workplace discrimination. It is critically important that the company investigate all such claims, and document non-discriminatory reasons (and supporting evidence) for past employment decisions that may only appear to have resulted from alleged discrimination. On the other hand, appropriate steps must be taken, consistent with company policies, to address workplace retaliation whenever evidence suggests that discriminatory animus is the reason for the retaliatory action.


Based on its counts from FY 2019, the EEOC lists disability-based discrimination as the agency’s second-most reported type of employment discrimination, at more than 24,238 reported cases, or 33.4%. The Americans with Disabilities Act of 1990 outlaws discriminating against people with disabilities in any aspect of public life.

In the context of the workplace, an employer cannot treat an employee or an applicant unfairly because he or she has any kind of disability. Similar to sexual discrimination in the workplace, disability discrimination can encompass allegations in hiring, termination, compensation, benefits, and any other area of employment. In fact, employers must also provide “reasonable accommodation” to employees with disabilities to allow them to perform their jobs at the same standards as employees without disabilities. For instance, an employer must provide braille materials to blind employees if this is the only accommodation needed for a blind employee to succeed.

It is worth noting that employers must comply only with reasonable requests--ones that would not cause an undue financial burden on the company; it is not a reasonable request for an employee with a disability to ask an employer to eliminate basic job functions, the absence of which would adversely affect a company’s performance, in order to accommodate him or her.


According to the EEOC’s FY 2019 data, the third-most-common type of claimed discrimination in the workplace—involving 23,976 charges, or 33.0%—is race-based. The Civil Rights Act of 1964 prohibits workplace discrimination based on race.

Allegations of racial discrimination arise from an employee’s belief that he or she is being treated unfairly, in any way, based on his or her race. Race discrimination charges are often brought on the basis of companywide outcomes—for example, a disparity in the rates of hiring, promotion, termination, or any other employment area wherein statistical under-representation on the basis of race seems to appear. However, allegations need not be company-wide; they can also be made at the individual or group level—for example, claims that a supervisor promotes only white employees, or even that a hiring manager requires employees to be of a minimum height to fill a position, knowing that members of a certain race or other group are unlikely to be that tall (and that height is not essential to performing the necessary tasks of that role).

Racial discrimination may also be alleged as unfair treatment related to wages, benefits, hours, and other areas of employment. In company-wide claims, collecting and analyzing data can be essential to a defense that relies on proving that differences that appear to be based on race are in fact explained by race-neutral characteristics and individual skills of employees. In instances wherein a company does not know how to account for differences in employment outcomes by group, it’s best if analysis of company data is undertaken proactively--not only to preemptively ensure that any observed adverse employment outcomes can be explained by race-neutral factors, but also to have the data available to explain such differences should an agency charge be filed.

Experts in Labor Economics

Workplace discrimination charges can be difficult for companies to anticipate and overwhelming to handle, particularly when litigation or investigations commence unexpectedly. Collecting the appropriate data proactively can seem like a daunting task, and companies may not even know where to begin. That’s where Welch Consulting’s labor economists come in. We can assist in collecting relevant data to assist in investigating your firm’s employment outcomes, clearly report the data to you, and help you to understand how to address any potential trouble spots that proactive analyses reveal. After data sources are organized and any shortcomings are appropriately addressed, your company will be in a stronger position to defend against agency investigations or private litigation discrimination claims.

Contact us today for industry-leading labor consulting. Welch’s economists also have extensive experience in litigation, having served as expert witnesses in numerous employee discrimination lawsuits. We are the vanguard in economic and labor data analysis; see for yourself the difference we can make.

Insurance Journal
EEOC Releases Fiscal Year 2016 Enforcement and Litigation Data
EEOC Releases Fiscal Year 2017 Enforcement And Litigation Data
EEOC Releases Fiscal Year 2018 Enforcement and Litigation Data
Insurance Business America

age discrimination in the workplace

The Role of Statistics in Age Discrimination Cases

age discrimination in the workplace

As numerous U.S. courts have found over a period of years in the 2010s, the case for statistics as evidence of age discrimination in the workplace is not clear cut. For instance, it might be alarming to see a substantial number of employees over age 50 be laid off from a company at one time; but drawing conclusions based on the ages of those laid off is unwise unless, at least, the ages of those not chosen for layoff are also known.  Further, aggregate statistics reveal nothing about a laid-off employee’s recent performance review or other factors that may have affected their individual selections.

That said, statistics play a key role in first objectively determining whether older workers comprise a disproportionately greater share of laid-off workers given the age distribution of laid off and retained employees. If it is shown that older workers are, in fact, not statistically more likely to be laid off than younger workers, it substantially undermines the claim of age discrimination. On the other hand, if statistics show that older workers are, in fact, statistically significantly more likely to have been laid off, simple statistics are not enough to prove instances of discrimination on their own.

Given that dynamic, here we will be exploring the place of statistics in workplace age discrimination cases with an eye to suggesting how Welch Consulting can proactively audit a firm’s employment practices to assess its litigation risk and help it avoid litigation entirely.

What Is Age Discrimination?

Age discrimination in the workplace involves an employer treating an employee unfairly because of his or her age. Age discrimination can be directed toward employees young and old, but in the contemporary United States, age discrimination claims are overwhelmingly related to “older” workers, those older than age 40, consistent with the Age Discrimination in Employment Act of 1967 (which forbids unfair treatment of employees aged 40 and older.)

Age discrimination, in theory, can take many forms in a professional setting, including in hiring, compensation, benefits, job responsibilities, promotions, and terminations. An employer might even be accused of discriminating against an older worker so frequently or intensely as to cause a significant decline in that worker’s productivity or career, leading to claims of harassment, a triable offense.

Rising Claims of Age Discrimination

With all that said, what do statistics actually tell us about the current state of age discrimination claims in the United States?

Multiple sources show that perceived instances of age discrimination are commonplace in the United States. In 2018, the AARP, the American Association of Retired Persons, reported the results of a survey in which 61 percent of people aged 45 or older claimed to have experienced age-based discrimination while on the job. To break down some specifics of that survey: AARP said that 16 percent of respondents believed their age prevented them from getting hired for a desired job, 12 percent said they failed to get promoted due to their age, and 7 percent claimed to have been laid off, fired, or otherwise separated from employment because of their age. Meanwhile, 33 percent of those respondents felt susceptible to future age discrimination.

Filed claims of age discrimination are also on the rise. In 2019, the Bermuda-based insurance company Hiscox released the results of an ageism study in which it found that the number of age-based discrimination cases filed with the Equal Employment Opportunity Commission by workers over age 65 had doubled between 1990 and 2017. The study also found that 44 percent of respondents said they personally or someone they knew experienced ageism at work, while 36 percent reported believing that their being over 40 had prevented them from getting new jobs.

What Can Statistics Say about Ageism?

Based on these observations, it is safe to say that allegations of age discrimination will continue to be a significant area of concern for employers, whether complaints are brought at the individual, or class, level.  But can aggregated statistics tell the full story behind incidents that may appear to be related to an employee’s age? No.

In order to be helpful, statistics must be paired with an understanding of employment outcomes involving more than the age of those affected—depending upon the allegation, it may relevant to know whether financial or operational considerations determined the areas affected by layoffs within a company; what experience, performance, education, or training differences existed between younger workers selected and older workers not selected in promotions, and so on.

When confronted with age discrimination lawsuits, different U.S. courts have arrived at different conclusions on the reliability, or role, of statistics themselves in those cases. For example, in 2018, the United States Court of Appeals for the Second Circuit in New York dismissed the age discrimination claim made in the case Benson v. Family Dollar Operations, Inc. Family Dollar employee Christopher Benson had asserted that his age was a factor in his employer demoting him to a less important position. He presented statistics to support his claim, saying that of the 41 employees in his department, only 13 had been promoted, and he believed his age was the reason he was not among those promoted.

In the end, the court dismissed the case based on these numbers because the sample size was too small to say that age discrimination definitively played a part in the decision. Furthermore, the court said, the statistics told nothing about Family Dollar’s rationale in making its promotions, such as the recent performance reviews of all employees.

Without additional evidence supporting the claim of age discrimination, the failure to present a robust statistical analysis that accounted for non-discriminatory factors that affected the decisions was enough to dismiss the claim in Benson v. Family Dollar Operations, Inc. In other cases, statistics may be only one component of the narrative to prove age discrimination.

Investigating Age Discrimination in the United States

As has been discussed, statistics can play a key role in evaluating claims of age discrimination, especially when statistics are paired with thorough investigations of the unique circumstances of the situation.

Of course, the ideal scenario is for an employer never to be sued for age discrimination, for this can involve paying out significant damages and garnering widespread negative publicity. Because differences in employment outcomes that appear to be adverse to older workers can happen without an employer truly realizing it, it is always better to proactively audit the effects of any proposed actions that could be construed as discriminatory before a triable case actually arises. Following a thorough data analysis, should litigation follow in any event, employers will know the strengths and weaknesses of their statistical case when planning a response.

For years, inside and outside counsel for firms across the United States have retained the labor economists at Welch Consulting to analyze their business practices and ensure they comply with employment laws throughout the United States. Let us examine the data around your human resources operations to recommend potential changes for your employment practices. It’s what we do for firms in nearly every industry in the country.

Contact Welch Consulting today to begin working with us to ensure a more complete understanding of employment practice outcomes.

U.S. Equal Employment Opportunity Commission
Benson v. Family Dollar Operations, Inc.
Pospis Law, PLLC
Psychology Today

employment discrimination lawsuits

Why Employment Discrimination Cases Are Rising Fast

employment discrimination lawsuits

Employment discrimination lawsuits are on the rise in the United States – it’s an attention-grabbing headline that has some interesting background data to support it. Even if you have never been directly exposed to employment discrimination, the term alone likely invokes notions of prejudice in the workplace.

When we claim that U.S. employment discrimination lawsuits are rising fast, we do not mean that there are more and more instances of actual discrimination occurring every year. Instead, it is more accurate to say that more employment discrimination cases are being reported now than ever before. As we detail here, that reporting can be tied to the ever-increasing publicization of discrimination claims in the workplace through traditional news and social media.

If we look at data from the federal government’s Equal Employment Opportunity Commission (EEOC) alone, we find that cases of numerous types of employment discrimination reached new highs between 2008 and 2012 before falling slightly. However, from the mid-to-late 2010s, the EEOC reported that the numbers of discrimination cases it received yearly were rising once again.

Why is this?

3 Reasons Employment Discrimination Cases Are Rising

We know since Title VII of the Civil Rights Act of 1964 was passed, discrimination on the basis of race has been illegal in American workplaces. Over time, additional areas where discrimination has been claimed—for example, on the basis of gender, age, national origin, religion, pregnancy, disability, and other employee characteristics—have contributed to a trend of increased litigation and agency activity.  Most recently, pay equity among men and women and among minority and non-minority employees has garnered attention and promises future litigation.  Let’s look at three factors leading to an increase in reported employment discrimination.

1. More People Are Aware of Discrimination Claims

In the late 2010s, American news outlets report discrimination cases at an extremely high rate. In 2017 alone, the New York Times reported more than 1,600 stories with “discrimination” somewhere in the title, while the Washington Post reported more than 2,000 such stories. Obviously, people who read these stories become aware of the forms that employment discrimination claims can take as well as the repercussions for employers found guilty of illegally discriminating.  Additionally, it is commonplace in many workplaces to provide employees with training courses in discrimination and harassment. Being more knowledgeable, in turn, increases the chances that an employee will file a discrimination case.

2. Increased Publicizing of Incidents

Consider an employment discrimination claim filed in, say, 1970. The employee’s family and friends might hear about it, as well as any lawyer hired, but few others would be aware of the claim.

Today, an employee has only to allege discrimination on social media and a significant portion of the country can become aware of it. Just by searching the right hashtags, social media users can encounter people they have never met who may experience, perhaps, similar workplace issues. According to The Balance Careers, these encounters can make people feel as though their own perceived discrimination issues are more common than they thought.

3. Retaliation Claim Rates are Rising Dramatically

Suppose a supervisor of two employees assigns more advanced tasks to the more experienced of the two employees, and that the less-experienced employee believes they are not assigned advanced work because of the color of their skin. This employee complains to human resources, thus making the problem known within the company’s management team. Soon after, the employees’ supervisor oversees a project that requires little to no co-worker contact but also less experience and assigns the less-experienced employee to work on this project. This employee believes that they have been demoted in retaliation for complaining to human resources and files an employment discrimination claim against his employer with the EEOC.

This is a very common scenario nowadays. In recent years, the EEOC has reported a marked increase in such claims; in fact, the EEOC reported in early 2017 that, of the 97,443 cases it resolved in 2016, retaliation was by far the most common basis, at 42,018 instances, or 45.9 percent of the total.

In the face of this recent emphasis on defending retaliation claims like the one above, employers should be aware that the data they maintain can be useful in determining whether other employees have, or have not, been treated differently than those claiming discrimination. In our example above for instance, it is important to have records of experience and qualifications to respond to claims that projects were assigned on the basis of gender, race, and other protected employee characteristics instead of legitimate and neutral factors.

Experts in Employment Discrimination Lawsuits

How is all of this relevant to American society as the 2020s begin? With no significant drop-off in alleged employment discrimination lawsuits over the last few years, you need more than ever expert advice in gathering, organizing and analyzing data in proactive consulting relationships, or analytical support and expert testimony during litigation.  Welch Consulting has long been called upon to examine workplace data for potential adverse outcomes in employee pay, promotions, hires, terminations and to guide employment practices, or, if needed, to provide expert testimony in lawsuits related to alleged differences in pay, promotions, terminations, and hiring.

Firms from all industries and throughout the country have retained the experts at Welch Consulting to perform audits of hiring, performance evaluations, compensation, terminations, and other employment practices in response to claims made by the EEOC, OFCCP, and private plaintiffs. Whether you require an audit or expert testimony in litigation, we provide comprehensive research and analysis and actionable advice that informs and improves the decision-making process of any organization.

Contact Welch Consulting to take full advantage of all of our resources.

wrongful termination

The Numbers Behind Workplace Discrimination

wrongful terminationDiscrimination, particularly in the workplace, is a common topic today. In 2018 alone, the Equal Employment Opportunity Commission, or the EEOC, received 76,418 charges of workplace discrimination. Cases of workplace discrimination should always be handled carefully. Thorough research when it comes to alleged workplace inequities or unfair treatment is important for both the employee and the company. Employees deserve to have a safe and equitable workplace and employers need to be assured that their human resource decisions are not giving rise to potential claims of discrimination in pay, promotions, hiring and/or terminations, to name several areas where litigation or agency investigations can arise.

What is Workplace Discrimination?

Workplace discrimination refers to the unfair treatment, or disparate impacts on employees due to them belonging to a certain group of people, also referred to as protected classes. Title VII of the Civil Rights Act of 1964 was put in place to make it illegal for workplaces to discriminate against protected classes. Workplace discrimination at the individual level can occur in many forms, some of which, such as verbal, can be difficult to prove. Workplace discrimination can have an effect on any aspect of a person’s professional life. An employee who is discriminated against might experience harassment at work, receive less pay, be passed up for promotions, or be wrongfully terminated. This can also occur during the hiring process as well (before a person is even officially employed by a company). Anyone can commit workplace discrimination, including supervisors, coworkers, and even those within a protected class. An employee prevailing in litigation on the basis of discrimination can claim, and be awarded, substantial monetary damages, including those for alleged economic loss.

Types of Workplace Discrimination

There are a number of different groups who are at risk of being discriminated against, including while they are at work. Some instances of workplace discrimination that are reported to the EEOC may involve more than one type of discrimination. 


Retaliation is the most common type of discrimination in the workplace, making up over half of all discrimination complaints in 2018 with a total of 39,469 charges filed, according to the EEOC. Retaliation occurs when an employee is treated unfairly due to speaking out about issues in the workplace. Reporting wrongdoings is a protected activity in the workplace and workers are allowed to challenge them. The reason for retaliation might even be that an employee made a complaint about another type of discrimination.   If retaliation is proven at trial, the wronged employee is likely to be awarded economic, and non-economic, monetary damages.


This is the second most common type of workplace discrimination, with slightly over 30% of all charges filed being those involving a person’s sex. Discrimination against a person’s sex can include their gender, sexual orientation, or transgender status. Sexual harassment is also considered to be a type of sex discrimination, which had a 13.6% increase in 2017. Discrimination against women who are pregnant, may become pregnant, or have recently given birth is illegal as well.  Unlike retaliation claims, sex discrimination is likely to be alleged on a class-wide basis, potentially for all female employees within a company. Defending class claims generally requires analysis of a company’s source databases and is aided by statistical analyses (for either liability issues, damages, or both).


Both the Americans with Disabilities Act and the Rehabilitation Act of 1973 make it illegal for a person with disabilities to be treated poorly at work due to it. Employers are expected to make accommodations for people with disabilities within reason. Discrimination against people with disabilities is another common form of discrimination, affecting nearly the same amount of people as discrimination against sex.  While legal claims of disability discrimination tend to be individual in nature, they can involve a class of persons alleging common treatment.


These types of discrimination involve unfair treatment against someone due to their race or the color of their skin tone. Color and race may have similarities, but they are not always the same. Race discrimination was the fourth most frequent charge with 24,600 filed charges, while color discrimination had 3,166 filed charges. Race/Color discrimination can be individually claimed, but class actions of a common, claimed race or color discrimination are frequently brought as a class, requiring statistical analysis to make, or rebut, alleged class-wide claims based on company source data. 


The Age Discrimination in Employ Act only protects people who are over the age of 40 from discrimination at work. Equal opportunities must be given to all employees regardless of their age. Age discrimination had 16,111 charges in 2018, making it the fourth most frequently filed charge of workplace discrimination that year.  Like sex and race/color discrimination, the most common claims against companies are likely to be brought as class actions, and like sex and race/color class actions, statistical analysis of company data will be needed, especially to defend against such claims.


All religions are protected from discrimination in the workplace, as well as people who have strong moral or ethical beliefs. Some religions might require special accommodations during the workday, which employers are required to provide so long as it doesn’t cause hardships. Religious accommodations might include certain types of dressing or allowing time for religious observances. In 2018 there were 2,859 charges filed by the EEOC for religious discrimination.

National Origin

Employees can not be discriminated against for their national origin, ethnicity, or accent. This includes discriminating against a person who only appears to have a certain national origin, even if they are not a part of it. This made up 9.3% of workplace discrimination charges filed in 2018, but many of these cases involved class-wide claims requiring substantial data analysis.   

Equal Pay Act

The Equal Pay Act requires employers to pay men and women equally for the same job. Receiving equal pay for equal jobs refers not only to salary, but other aspects such as paid time off, life insurance, bonuses, and other benefits as well. When pay inequalities occur, it is illegal for employers to lower one gender’s pay to make it equal. There were 1,066 filed charges of pay inequalities in 2018.

Genetic Information

A person’s genetic information can refer to a few different things. Genetic information can be the information found through genetic testing, or the genetic tests of family members, as well as the risk of getting a disease or disorder due to it. This is the least reported type of discrimination, with 220 charges filed for it in 2018. 

Consulting Services for Workplace Discrimination

Allegations of discrimination can affect every member of a company. In addition, there’s a significant amount of information that needs to be taken into consideration, especially in individual-level matters where economic damages after termination are being claimed. In single-plaintiff matters, analyzing data on local labor markets, post-termination mitigation efforts and estimated economic damages can greatly assist the defense in economic damage claims.  In class action claims of adverse treatment or impacts, data from multiple company source files may be necessary to consider, and statistical analyses arising from these data can be essential to defending against a class-wide claim of discrimination.  At Welch Consulting, we have a number of expert labor economists who work with both class action and single-plaintiff workplace discrimination cases. 

Welch Consulting provides consulting, and testifying, services for all industries and has extensive experience when it comes to analyzing data regarding workplace discrimination. The discovery phase, in particular, when data collection, organization, and analysis can help shape a defense, is crucial.  If, in spite of proactive analysis, litigation proceeds, Welch Consulting can provide expert witnesses in any workplace discrimination lawsuit. 

For more information about how our services benefit workplace discrimination lawsuits, contact Welch Consulting to speak to one of our experts.  



G. Edward (Ted) Anderson is a Senior Economist and Principal of Welch Consulting, located in the Los Angeles, California office.

economic damages

Determining Economic Damages from Wrongful Termination

economic damagesEmployers do not always need to provide a good reason for terminating their employees, but in some cases, it can be considered wrongful termination. The remedy for wrongfully terminating an employee is typically to provide financial compensation for economic damages the employee faced. Whenever a person is terminated from their position, it is expected that they will go through some period of economic loss prior to finding a new job. Even after they find a new job, they still might not be able to make the same amount as in their previous position. 

Many factors play into what economic damages result from wrongful termination and they may vary greatly from person to person. The help of expert economists is frequently used in order to determine economic damages that have occurred after a wrongful termination. Labor economists play an important part in wrongful termination cases and their input on these matters greatly affects the outcome. 

Lost Earnings

The economic damages that occur from a wrongful termination are caused by a person’s lost earning from losing their job. A person’s lost earnings can also vary depending on the amount of time they were unemployed. This includes receiving compensation for back pay and front pay. 

Back Pay

Back pay refers to the amount that the employee would have made from the date they were terminated up until the day the trial begins. Had they not have been fired, this is the amount they would have made. The employee’s back pay would be the amount of their lost earnings during this period. Determining how much a person’s back pay is can be simple by providing documentation of their previous earning in the position, including any benefits or bonuses they might receive. 

Front Pay

Front pay is intended to provide compensation so that it makes it as if the employee was never terminated. After being let go, it can take longer for a person to make the same amount they had with their old position. Unlike back pay, front pay provides compensation going into the future, not only up to the day of the trial. This is done when reinstatement is not an option, which could be the case for a number of reasons. Determining front pay can be difficult, which requires economists to determine when the employee would realistically be at the same level they were before they were terminated.  

Loss of fringe benefits

In many jobs, a person’s wages are not the only economic loss they might have experienced. The loss of benefits from their termination must also be determined to understand what the economic damages are. For many, these benefits include medical coverage provided by their employer. Some companies might also offer benefits such as stock options and transportation reimbursement. A common benefit that many employees have through their employer is retirement plans. The total amount of benefits a person receives from their employer can be significant, so it’s important that these are taken into consideration when determining economic damages. 

Efforts to Mitigate Loss

The natural step to take after losing a job is to find a new one quickly, and it’s also expected of someone after they’ve been wrongfully terminated. After being terminated, employees do have a duty to mitigate the damages they might have faced. A person must be able to prove that they made efforts to find a new, comparable job for themselves. That’s to say, an employee can’t pass up job opportunities if they’re available. 

The defendant may be able to show that no significant attempts to secure a new job were made, which would make the economic damages they’ve faced worse. If a person doesn’t make an adequate attempt to provide for themselves when positions where available, they can’t place all of the blame on their employer. In order to show this, defendants may gather information regarding similar jobs in their location the employee could have applied to but failed to do. 

If the employee has already been hired for a similar job, the amount they are owed in back pay can also change depending on their new wages. In some events, a person might take a new job after they were wrongfully terminated where the pay is greater than what they had previously made. If the employee makes more in their new job, these wages can be used to offset what they would have been owed in back pay.  

Labor Economist Consulting Services

Determining economic damages from wrongful termination requires close attention to detail to carefully analyze all data involved. With the help of experienced labor economists, economic damages can be clearly proven, making them critical in wrongful termination cases.



G. Edward (Ted) Anderson is a Senior Economist and Principal of Welch Consulting, located in the Los Angeles, California office.