Today, March 24, 2021, is Equal Pay Day. Equal Pay Day is not a holiday but rather a time for somber reflection and strategic planning. According to the National Committee on Pay Equity, “This date symbolizes how far into the year women must work to earn what men earned in the previous year.” It began in 1996 as a public awareness event by the National Committee on Pay Equity to illustrate the gap between men’s and women’s wages.
Below are several critical steps your organization can take right now to become part of the equal pay solution.
1. Conduct a Pay Equity Analysis
Many companies may be hesitant to do this for fear of finding a problem and having that information used against them in lawsuits filed by disgruntled employees. This view is problematic for a number of reasons. First, “out of sight, out of mind” is not an effective compliance strategy. Without a comprehensive understanding of the pay systems in their organizations, business leaders cannot accurately make decisions concerning issues such as risk management, recruitment, retention, and employee engagement.
Second, more and more jurisdictions are incentivizing pay equity analyses by creating litigation “safe harbors” for employers that do so. Recent examples include Massachusetts, Colorado, and Oregon.
2. Consider Partnering with An Expert
What kind of expertise is required to conduct a pay equity analysis? Most employers are not equipped to conduct this analysis on their own, which requires regulatory, data science, and statistical expertise. Employers should consider partnering with an organization experienced in pay data and analytics to conduct an audit of their current compensation structure. Such an analysis can tell you, on an individual, department by department, or company-wide level where pay issues exist and how to proactively address them.
Overall, a comprehensive pay equity analysis is the best place to start to understand what your company is doing right, and where it can improve before employee complaints, lawsuits, or regulatory issues arise.
3. Be Informed When Making Pay Adjustments
If you find you need to make pay adjustments because unexplainable pay disparities exist between different groups of employees, such as men and women, strategically making pay adjustments is critical so that additional liability is not created in the process. A misinformed remediation strategy could actually make the wage gap wider in certain instances
4. Be a Leader in Tackling Pay Equity
Pay equity affects everyone, both in private companies and in government. Many organizations, such as Starbucks, Apple, Salesforce, Intel, and Adobe are working to achieve equal pay. Adobe’s Executive Vice President Donna Morris stated in an interview with Fortune, “If you fundamentally believe that people are the most important asset to your company, why wouldn’t you seek to establish practices and programs, and have a principle that you should compensate fairly based on their contribution?” Make sure your organization is a step ahead in the effort to provide equal pay for all employees. Be a leader in this effort and reap the rewards of a more enthusiastic workforce, positive PR, and avoiding costly regulatory penalties. This is one effort where you don’t want to be standing on the sidelines for long.
To learn more about pay equity, and the benefits of getting ahead of the trend by performing a pay equity audit, we invite you to download our white paper; What is Pay Equity?If you have additional questions regarding pay equity and where to get started, contact us to have a cost-free Pay Gap Risk Assessment performed.
Organizations looking to disclose pay equity, diversity, and inclusion data information should do so within an ESG reporting framework. Download our white paper, DEI in ESG Reporting to learn about the different standards you can leverage for sharing your progress.