Illinois SB 1480 Pay Data Reporting Law Gets Amended

Equal Pay Day occurred on March 31, 2020. 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.

Now, 24 years later, Equal Pay is still as significant as it was then. According to the Washington Post, closing the gender pay gap will take 23 to 144 years, depending on which state you live in. This means that Equal Pay Day may continue into the year 2159. The numbers look even starker when you consider other intersections of identity, such as race. August 22, 2019 was Black Women’s Equal Pay Day, as detailed in Forbes.

Here are several critical steps your organization can take right now to address equal pay.

Conduct a Pay Equity Analysis

Many companies have been hesitant to do this for fear of finding a problem and having that information used against them in lawsuits filed by disgruntled employees. Fight your fear and get this done for your organization. Regulatory agencies, such as the OFCCP and the
Massachusetts Attorney General’s office, are encouraging employers to conduct their own self-audits to identify where they may be lacking in providing equal pay to their workers. This is viewed by these agencies as a proactive step in addressing equal pay issues.

Most employers are not equipped to conduct this analysis on their own, even if they have an experienced statistician on staff. Most employers need to seriously consider engaging a company experienced in pay data and analytics to conduct an audit of their current compensation structure. The analysis should tell you where your company’s exposure is with respect to lawsuits and federal or state penalties. The pay equity analysis should also tell you how to address problem areas, without creating more liability.

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 regulatory investigations and employee lawsuits require you to provide this information.

Remain Consistent When Making Pay Adjustments

If you find you need to make pay adjustments because unexplainable pay disparities exist between different groups, such as men and women, be consistent in the way you apply these pay adjustments and document the reasons for why you are making them. The Equal Pay Act does state, however, that employees cannot receive a pay cut in order to make up for a disparity in pay with other groups.

Devise a Plan for Communicating Pay Adjustments Across your Organization

When strategizing a plan for correcting pay disparities within your organization, appropriate internal and external parties should be notified. There shouldn’t be any surprises for stakeholders, executives or employees. Also consider how pay adjustments will be communicated to your workforce. Give careful consideration for how the message will be delivered to affected employees.

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 principal 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—especially not until the year 2159.