You may have seen the Equal Pay Act in the news quite a bit lately, with lawsuits filed recently against major companies including Google and Barclays. The claims alleged that both companies discriminated against female employees by paying them less than their male counterparts. Although both lawsuits were dismissed, they were potentially damaging to the companies’ reputation and morale, and of course the consequences could have been severe had the lawsuits gone the other way.
Pay can be a tricky subject, but there are ways to ensure you’re both treating your employees equally, and protecting yourself and your company from Equal Pay Act claims. The first step is to ensure that you understand the law. The Equal Pay Act is enforced by the U.S. Equal Employment Opportunity Commission (EEOC) and “requires that men and women be given equal pay for equal work in the same establishment.” While the jobs don’t necessarily need to be identical, they must be substantially equal. “It is job content, not job titles, that determines whether jobs are substantially equal,” the law states.
Other factors to take into consideration when assessing pay include:
- Skills required for the job
- Amount of physical or mental effort needed to perform the job
- Degree of accountability or responsibility required in performing the job
- Working conditions (including physical surroundings and hazards)
On the flip side, pay differences are warranted when they are based on seniority, merit, quantity or quality of production, or a factor other than gender.
Now that you’re familiar the law, the next step is to reevaluate your current system. With the new year right around the corner, it’s generally a good time to conduct these types of audits – and it’s always better to be proactive in this area.
Here are a few questions to ask as you audit your current pay practices:
- How are starting salaries, benefits, bonuses, overtime, etc. determined?
- What warrants a pay raise or bonus?
- How are job duties assigned?
- Do current job descriptions need to be tweaked to ensure accuracy?
- When was the last time your executive team reviewed the above together?
After you perform this audit, you may begin to see discrepancies – or at the very least, room for interpretation. Once you clarify roles and duties, you may need to even out the pay structure. But just remember: The Equal Pay Act mandates that employers increase the pay of the person who is receiving the lesser amount, rather than decreasing the higher pay in order to match that of the lesser.
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