Pay Equity: Are You Within the Law?

Pay equity has received a lot of exposure recently. The salary gap between men and women, as well as minorities, is well documented. Consequently, laws are tightening to reduce this gap. As an employer, it’s important to understand the concept of pay equity and to stay within the law.


Relevant Laws

There are two specific laws that are designed to prevent wage discrimination. One is The Equal Pay Act of 1963, which was created to eliminate wage disparity between men and women. It was enacted during the Kennedy Administration when there was a massive discrepancy in salary between genders.

The other is Title VII of the Civil Rights Act of 1964. This took aim at preventing wage discrimination based on race, color, sex, religion or national origin.


Minimal Impact Thus Far

You could argue that these two laws regarding pay equity have fallen short of hitting their mark. This is primarily due to a lack of enforcement and the fact that pay equity-related lawsuits are difficult to win. Even though these laws have been in place for more than half a century, their impact has been fairly minimal.

Here is some data to put it in perspective. “In 2009, Evelyn Murphy, president of The WAGE Project, estimated the wage gap was 23 percent, meaning that the average American woman was paid 77 cents for every dollar made by a man. Over the course of a 47-year worklife, a woman will lose between $700,000 and $2 million to the wage gap.”


Pay Equity Getting More Attention

Wage equity has recently become a hotbed of conversation. In fact, the Equal Employment Opportunity Commission (EEOC) and Office of Federal Contract Compliance Programs have been working to increase regulations to reduce the wage gap.

For instance, there is a proposed requirement for the EEOC to require federal contractors to report W-2 earnings along with annual filings. According to the U.S. Department of Labor, the Pay Transparency Nondiscrimination Provision, “Provides applicants and employees notice that the employer will not discriminate against them for inquiring about, discussing or disclosing their pay or, in certain circumstances, the pay of their co-workers.”

It’s likely that regulations are going to tighten in upcoming years. As a result, pay equity is something to take seriously and address if you haven’t done so already. Your HR team should stay abreast of updates in this area and ensure that your company is doing everything possible to prevent wage gaps between your employees.


Pay Equity Self-Audit

One way to take immediate action is to perform a self-audit to assess how your company stacks up and determine if there are any areas that need your attention. Consult this resource from The National Committee on Pay Equity for a 10-step guide on how to go about the process.

Differences in pay between men and women and minorities has been an ongoing issue. However, it’s clear that measures are being taken to reduce this disparity and ensure pay equity among workers. This makes it something that should be on your radar and an area you should give plenty of attention to moving forward.

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