Question: How do I ensure I’m complying with state and national pay equity laws?
Answer: Pay equity laws across the United States present a confusing patchwork of regulations. This is especially difficult for companies operating across multiple states—but can also be difficult for smaller organizations operating in just one state.
Take These Steps for Pay Equity Compliance With Changing Laws
- Assess pay equity on a regular basis: Use a robust statistical approach, such as multiple regression, to ensure legitimate differences in pay are accounted for.
- Group employees into meaningful pools for comparison purposes: We believe few states and courts will continue to uphold a narrow “equal work” stance; a relaxation of this standard toward “substantially similar work” is likely. For some organizations, this might mean conducting or renewing a formal job evaluation.
- Designate a team that is responsible for assessing pay equity and implementing a formal remediation process. This team should:
- Conduct (or oversee) the assessment
- Identify groups with unexplained pay gaps
- Conduct targeted research on employees potentially requiring an adjustment
- Document explanations for adjustments
- Ensure adjustments are made
We believe few states and courts will continue to uphold a narrow “equal work” stance; a relaxation of this standard toward “substantially similar work” is likely.
We expect individual states to continue to enact aggressive equal pay laws. Organizations can get ahead by mobilizing HR resources now to mitigate pay equity risk.