Good Counsel: Dollar for Dollar
Avoid gender inequities when setting staff compensation.
Equal-pay laws have become a hot topic as more states and municipalities enact laws to reduce the gender pay gap and as companies tout their equal-pay policies to attract the best job candidates.
According to the National Committee on Pay Equity, when the Federal Equal Pay Act (EPA) was adopted in 1963, women were earning, on average, 59 cents for every dollar a man made. As of 2015, women were still paid only 79.6 cents compared to a man’s dollar. The Institute for Women’s Policy Research has determined that if the wage gap continues to close at this slow rate, it will persist until at least 2059. To accelerate change, states and municipalities are passing stricter and more targeted equal-pay laws.
The EPA allows unequal wages as long as they are based on “any factor other than sex”—a low bar for an employer to meet if seeking to rationalize unequal pay. Many of the new state and local laws have higher standards: The trend is to require the comparison of similar, not just equal, jobs and to demand that the “factor other than sex” be a bona fide job-related factor.
In some jurisdictions, this means employers are prohibited from asking a job candidate about past or current salary or setting compensation based on the candidate’s salary history. These laws aim to link compensation to the nature of the job and the qualifications it requires, rather than to the past earnings, gender, or other personal traits of the person doing the job.
To ensure that your association is in compliance with state and local pay-equity laws, research the laws in the jurisdictions where you have employees. Look into removing any inquiries about salary history from job applications, and train staff who conduct interviews about laws and your organization’s guidelines regarding questions relating to a candidate’s salary history. Also consider an internal pay-equity audit that is protected by attorney-client privilege. After an audit, you can adjust existing employees’ pay as needed, but be sure to do so only based on legitimate job-related reasons.
Pay equity is now a factor that makes an organization attractive to potential job candidates. To advance equitable compensation, associations may want to consider adopting practices above and beyond those currently required by law.