April 4 is Equal Pay Day—a day originated by the National Committee on Pay Equity designating how far into the calendar year women would have to work to earn the same as men in the previous year.
Much like using the start of Daylight Saving Time as a reminder to check that your smoke alarm batteries are working, employers can use Equal Pay Day as a reminder to check in with their compensation policies and practices to make sure that they are up to date. This is increasingly important, given the number of new regulatory and state law changes that have been enacted or proposed on the topic of pay equity recently. Here are five ways that an employer can commemorate Equal Pay Day:
- Review and refresh your equal employment opportunity (EEO) policy. Review your EEO policy to ensure that it addresses principles of compensation and is up to date on all the applicable protected classes in your jurisdiction.
- Consider conducting a pay equity audit. As we have noted, employers should consider conducting audits of their compensation practices and decision making processes to identify any potential areas of concern.
- Review your offer letters and policies to eliminate prohibitions on discussing wages in the workplace. It used to be that employers could prohibit employees from discussing compensation with each other. Over the last several years, as transparency initiatives have grown, such prohibitions are considered unlawful and retaliatory.
- Consider limiting how you use current salary to establish starting pay. A number of new state laws and local ordinances have been enacted in the last year that limit how an employer can use an applicant’s current pay to establish starting pay.
While as of now only Massachusetts employers will be prohibited from asking about current pay, employers in other states are not permitted to rely on current pay when determining what a new employee’s salary will be. To the extent your current practice relies on this information, you should consider updating your guidelines, and even job applications, accordingly.
- Update manager training to include principles of pay equity. To the extent your managers have input into establishing employee pay, you should train them on EEO principles in general, and specifically about the importance of pay equity.
