If you don’t pay all employees equal pay for equal work, you can violate:
- Title VII
- The Equal Pay Act
- State employment discrimination laws
- State equal pay laws
- Salary History laws
Pay Equity is also a huge problem. Pew Research in 2016 determined:
- White and Asian men earn the most 100%+
- Asian women 87%
- White women 82%
- Black men 73%
- Hispanic men 69%
- Black women 65%
- Hispanic women 58%
If the pace of change in the annual earnings ratio continues at the same rate as it has since 1960, it will take another 40 years, until 2059, for men and women to reach parity. (Institute for Women’s Policy Research, 2017.)
I recently cited these statistics at a conference and several people came up to me to ask how employers should best deal with pay equity. After some discussion, what they actually meant was how can we avoid having to pay people more?
The answer is simple: You can’t.
The easiest way to deal with pay equity is to comply with the law. Run the numbers and do the math. Correct the problems.
Are there circumstances where pay can be different?
Yes. When the work is actually different.
What if we can’t afford it?
Like most employment laws, like the requirement for workers’ compensation insurance, sexual harassment training, and discrimination laws, affordability is not a defense. If you can’t afford to run a company and comply with the law, you should not be running a company.
Can we save money by lowering some people’s pay so that pay is equal?
No. You cannot lower higher earner’s pay. You can only increase the pay of people who are being underpaid.
What is the salary history ban?
Currently, only 13 states (either statewide or government) and 11 local entities (mostly government employment) have laws that prohibit employers from asking candidates about their salary history. The idea is not to perpetuate past discrimination by basing a job offer on what someone made before.
Regardless whether your state has a law, don’t ask about past salary. You still can be discriminating if you pay the candidate less. Instead, ask what they are looking for, better yet, give the salary range for the job and ask if that is consistent with their expectations.
If there is a claim, do I have to give my employee compensation data?
Yes. It’s all there in your payroll data and it is discoverable by a plaintiff in a lawsuit. Don’t be surprised. Go find out what is happening and fix it.
Look at your data, correct problems, establish equitable salary ranges for jobs based on market analysis and what you pay the highest earners for that job class.
The way an organization pays people reflects what it values.
It’s time to value everyone.