While U.S. companies continue to grapple with issues posed by the Covid-19 pandemic,pay equity issues should not be put on the backburner. On March 16, 2020, the United States Department of Labor announced the resolution of a pay equity claim brought by the Office of Federal Contract Compliance Programs (“OFCCP”) against Cisco Systems, Inc. The OFCCP is an agency within the Department of Labor responsible for enforcing federal equal employment opportunity laws for contractors and subcontractors with federal contracts. As a condition of receipt of federal funds, contractors may be subject to an OFCCP audit, including a compensation analysis. In the case of Cisco Systems, Inc., the OFCCP determined that the household name in networking infrastructure had significant pay equity issues in its compensation structure.
Under the resolution, Cisco Systems, Inc. has agreed to pay $2,000,000 in lost wages and $2,750,000 in pay-equity adjustments to employees nationwide. “This agreement ensures that employees from Cisco Systems Inc. are compensated fairly, and will prevent similar issues from happening again at any of its facilities,” said Office of Federal Contract Compliance Programs’ Regional Director Jane Suhr, in San Francisco, California.
Employers should consider a comprehensive pay equity audit to assess pay gaps and pay disparities in their compensation structures. Such an audit should be an essential part of an employers’ pay equity strategy. A pay equity audit can be conducted under the attorney client privilege using a combination of gender pay gap software and expertise in pay equity regulations and statistical models. However the analysis is conducted, employers should keep in mind the Triangle of Trustsm: trust in data, trust in software and trust in regulatory expertise. Click here to find out more about how Trusaic can help your organization achieve its pay equity goals.
Conducting a pay equity audit is a key component to ensuring equitable compensation within your organization. Just as important as the analysis is how you communicate findings and progress with various stakeholders. Download The Pay Equity Communications Planner to learn best practices for discussing compensation, both internally and externally.