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 killings of George Floyd, Breonna Taylor, Rayshard Brooks, and too many 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, could be unintentional. Even well-meaning policies or practices can have a deleterious 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 that organizations conduct a pay equity audit.
A pay equity audit is an analytical tool that seeks to explain internal differences in pay across the workforce in terms of justifiable business factors, typically involving statistical analyses. By providing employers with a quantitative view of the consequences of their pay practices, pay equity audits to help evaluate whether those pay practices best support the organization’s priorities. And now more than ever organizations are being asked to prove their commitments to workplace equality through actions, good intentions are no longer good enough.
An organization committing itself to become more antiracist should have pay practices that reflect, at minimum, a commitment to equal employment opportunity. A pay equity audit is the best method of gleaning insight about the status quo in order to make transformations in line with stated goals.
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.