A federal court ruling in April 2018 brought about some long anticipated changes in the battle for equal pay. The case took place in California, but resulting changes occurred across the country. The win brought changes in the interpretation of the Equal Pay Act, overturning a ruling from 1982. In the past, prior salary was an acceptable means for establishing pay during the hiring process. The new federal ruling means that pay history can no longer have an effect on current hiring salary.
After the ruling, several states overhauled equal pay laws, including pay history bans in California, Delaware, Hawaii, Massachusetts, New Jersey, Oregon, Puerto Rico, Vermont, New York City, Philadelphia and San Francisco. The use of prior pay as a salary guideline is seen as a e perpetuation of wage gaps established in the past. As many states update laws regarding equal pay rates, it is important to make sure your company is following the required standards. Any comprehensive review of your pay practices or your pay equity strategy should be assisted by legal counsel (for privilege purposes), but below are tips that can help you work towards greater compliance with equal pay changes.
Tips for Maintaining Compliance
Maintaining equal pay compliance depends on following both state and federal laws. Besides staying updated on the changing laws, it’s important to identify if any discrepancies exist within your business. Often, the first step to current compliance is to understand the gaps created in the past.
Analyze Pay Differences
Performing an analysis of the past pay differences between men and women in your workforce can help you avoid mistakes in the future. When studying these differences, it’s necessary to compare the pay rates of male and female jobs with similar functions. It’s not unusual for this type of analysis to uncover gaps you didn’t realize existed.
Update Salary Ranges for Job Descriptions
Updated job descriptions will help identify comparable functions of similar jobs between men and women. Each job must have a salary range that shows the value of that job to the company. Updated job descriptions will help determine the appropriate salary range. These job descriptions will be used to help eliminate current gaps and prevent the same problems from occurring in the future.
Classify Job Functions
It is difficult to classify the functions of every job within a business. However, this is one of the most important components of staying compliant. The demand for “equal pay for equal work” relates directly to the requirements of a job instead of the job’s title. Instead of comparing identical jobs, the pay scale should be related to the functions within a job.
Present a Plan to Close the Gap
It would be impossible to completely fix every problem immediately. Instead, begin with a show of progress that has been made. Outline steps for future improvement. Use this as a guideline to present a leadership plan for when the wage gap is eliminated. An established timeline will help keep your plan on track.
Show Salary Ranges to New Hires
Instead of inquiring about salary history, show potential employees the salary range for the job they are interested in. This action will give prospective hires an understanding of the value of their job to the company.
Compliance is not only necessary because it’s the law. It’s a vital part of your business to maintain fairness within your workplace. The creation of an equal workplace will build trust and boost morale within the company. Making a difference begins with one person. Complete wage gap elimination only works with the expectation that the change is a necessity.