Pay Equity Audits are Key to Combating Racial Injustice in the Workplace

“What is the impact of not being valued? How do you measure the loss of what a human being does not receive?”

This quote is from Patrisse Cullors, one of the co-founders of Black Lives Matter (BLM). Although Ms. Cullors may or may or may not have been thinking of pay equity, a recent article in the Harvard Business Review makes clear that companies seeking to fight racial discrimination must do more than tweet words of support—they must act.

In the article, The 10 Commitments Companies Must Make to Advance Racial Justice, author Mark R. Kramer highlights what businesses must do to implement real change to combat policies or practices that lead to the devaluation of workers of color. This blog post focuses on the first two of the ten commitments, but Trusaic recommends organizations read the whole article to determine how to effectuate its additional policy recommendations.

According to Mr. Kramer, businesses must first commit to anti-racist policies and training. There is a host of resources for companies to consider in this regard. For example, in June 2020, CNBC published a piece about “what it really looks like to lead an anti-racist organization.” The Equal Employment Opportunity Commission (EEOC) has online guidance for employers for addressing racial discrimination in the workplace. Forbes has published a number of articles and opinion pieces highlighting anti-racist action. To start, Kramer recommends adopting a zero-tolerance policy towards racism.

Second, businesses should commit to pay equity. According to Kramer, “There is no longer any excuse for disparities in the wages paid to people of color and especially to women of color whose pay is twice discounted. Conduct a wage equity audit, and make the adjustments needed to achieve fair and equitable pay.” He is not alone in this recommendation. Experts across the human capital, legal services, and business intelligence industries recommend a pay equity as a means to rectify inequities in companies’ compensation structures.

Compensation decisions resulting in, for example, racial pay gaps, need not be deliberate in order to create legal issues. Under federal civil rights laws, the doctrine of “disparate impact” does not require employer intent in order to establish culpability. Sarah Smith Kuehel, Esq., explains this concept in an article in the National Law Review: “Under a court’s ‘disparate impact’ or ‘adverse impact’ analysis, a plaintiff can prevail in a lawsuit by establishing an employer’s policy or practice affects members of the protected group so disproportionately that the court can infer discrimination from that impact.” Ultimately, businesses should play a key role in ensuring workers of color are not devalued.

Not sure where to begin a pay equity audit? Let Trusaic provide your organization with a free Pay Gap 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