Finance News & Insights

Equal pay enforcement beefed up on all fronts: Here’s how Finance can stay safe

Heads up: You’ll probably want to huddle with Payroll and review your pay practices and policies ASAP.
Reason: On top of the feds’ commitment to equal pay, there’s a lot happening on the state and local levels.

A number of states and cities – such as California, New York and New Orleans – have already enacted new laws, and plenty of others are weighing similar legislation.

These state/local laws and legislation put an increased burden of proof on employers to justify any pay differentials, allow workers to talk about pay, have more strict anti-retaliation rules and prohibit firms from asking about previous salaries.

And if a recent lawsuit by ex-Google employees does become a class-action, you can bet there will be plenty of money-hungry attorneys out there willing to follow the lead of the suit against the tech giant.

Luckily, employers have options.

Keeping the feds, attorney at bay

During a recent presentation at the 2017 SHRM Conference, employment attorneys Lara C. de Leon and Joseph L. Beachboard outlined some proactive steps employers can take right now to keep aggressive federal, state and local agents and attorneys at bay.

The best place to start is with a review of the compensation process, with close attention to how decisions are made and documented.

From there, comp data – from starting, current and promotional pay to bonuses and other types of comp should be analyzed. Ask questions like, “Are raises consistent with our evaluations? What types of factors are behind our pay decisions?”

As an added safeguard, employers may want to bring in an expert and conduct a full-scale pay audit.

If you take this step, you want to have a clear purpose before the audit takes place. Example: Is the purpose to determine and hopefully justify any pay disparities within the business? within certain job categories? both?

3 keys to compliance

Some additional best practices:

  • Have written policies for any pay increases/bonuses (with objective, quantifiable factors)
  • Document all pay decisions, and
  • Train interviewers/decision-makers.

Based on “Equal Pay is Here to Stay: Keeping Ahead of the Pay Equity Curve, by Lara C. de Leon and Joseph L. Beachboard, presented at the 2017 SHRM Conference in New Orleans.

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