How Pay Equity Audits Can Help Companies Avoid Racial Discrimination

As the historian Howard Zinn said, “you can’t be neutral on a moving train.” The waves of community outreach, protests, and activism following the killing of George Floyd, Breonna Taylor, Rayshard Brooks, and others present employers with an opportunity to implement or reinforce antiracist policies at work. One critical step in accomplishing this task is to eradicate pay disparities based on race.

Under U.S. civil rights laws, discrimination is often talked about in terms of two key categories: disparate treatment and disparate impact. Disparate treatment here is intentional discrimination based on someone’s race. Disparate impact, on the other hand, is generally unintentional, and based on policies or practices that have a disproportionate effect on workers based on their race. Employers are liable for both forms of discrimination.

To address unintentional discrimination on the basis of race and other protected classes, experts from across the human capital, legal services, and employee benefits industries recommend a pay equity audit (PEA). A PEA is an analytical tool that seeks to explain internal differences in pay across the workforce in terms of justifiable business factors, usually involving regression analyses. By providing employers with a quantitative view of the consequences of their pay practices, PEAs help to evaluate whether those pay practices best support the organization’s priorities. An organization committing itself to becoming more antiracist should have pay practices that reflect, at minimum, a commitment to equal employment opportunity. A PEA is the best method of gleaning the insight about the status quo in order to make transformations in line with stated goals.

Not sure how to get started? Let Trusaic provide your organization with a free Pay Gap Risk Analysis which can be conducted confidentially and under the attorney-client privilege.

Here is what you will get:

• 1-hour consultation to our pay equity team comprised of regulatory compliance experts and data scientists;
• Answers to your pay equity questions;
• A pay gap analysis of your workforce.