An employment discrimination claim needs an economist when the loss extends beyond a short, documented period of back pay. Once front pay is claimed, once the lost compensation includes bonuses, equity, or benefit accruals that must be reconstructed, or once mitigation is contested, the analysis requires a year-by-year comparison of the but-for compensation path and the actual path that counsel should not present without an expert. The first step is to assemble the employee's compensation history and the employer's pay practices, because the but-for path is built from both.
Checklist
Gather the employee's pay history: W-2s, pay stubs, bonus and commission statements, and equity award records
Obtain the employer's compensation policies, raise schedules, and benefit plan documents
Document the employee's job search and any replacement earnings since the adverse action
Identify comparators whose pay progression shows what the employee's path would have been
Note the employee's age and tenure, which bear on the front pay period and on pension losses
Questions to ask the economist
How do you bound the front pay period, and what evidence do you rely on for it?
How do you treat replacement earnings that are lower, higher, or from a different kind of work?
How do you value lost equity awards, bonuses, and retirement contributions?
Can you provide a preliminary back pay figure quickly for mediation?
Timeline
One to two weeks to a preliminary back pay figure from the pay records. A full back pay, front pay, and benefits report follows the retention and records phases.
Required documents
W-2s, pay stubs, and bonus or commission statements for the years before and after the adverse action
Employer compensation policies and benefit plan documents
Records of the job search and any replacement employment
Personnel file entries bearing on pay, promotion, and performance
Common pitfalls
Claiming back pay from the last pay rate alone, without the raises, bonuses, and benefit accruals the employee would have received
Leaving the front pay period unsupported, which is the assumption the opposing side attacks first
Ignoring the mitigation record until the deposition, when the economist must explain it
What is the difference between back pay and front pay in the economic analysis?
Back pay covers the period from the adverse action to the date of trial or analysis and is built from records of what the employee would have earned. Front pay covers the future period needed to reach comparable compensation and must be projected and discounted. Both are measured against the compensation the employee actually received or should reasonably have received from replacement work.
When is an economist worth the cost in a discrimination claim?
When the loss extends past a short, documented period of back pay: when front pay is claimed, when bonuses, equity, or benefit accruals must be reconstructed, or when mitigation is contested. For a short back pay period built from pay stubs, counsel can present the figure without an expert. The engagement letter can scope a preliminary back pay figure first so the cost stays proportionate.
Does the economist need the employer's records before an analysis can begin?
A preliminary back pay figure can be built from the employee's own pay records and the last rate of pay. The but-for path beyond that, with raises, promotions, and bonuses, depends on the employer's compensation policies and comparator data, which usually come through discovery. Counsel should time the full report after those records are produced.
References
U.S. Bureau of Labor Statistics. (n.d.). Current Population Survey (CPS). U.S. Department of Labor. bls.gov
U.S. Bureau of Labor Statistics. (n.d.). Occupational Employment and Wage Statistics (OEWS). U.S. Department of Labor. bls.gov
U.S. Bureau of Labor Statistics. (n.d.). Employer Costs for Employee Compensation (ECEC). U.S. Department of Labor. bls.gov