Are Your Employees Paid Equitably?

On the federal level, Title VII of the Civil Rights Act of 1964 as well as many new state laws prohibit pay and benefits discrimination on the basis of race, color, sex, religion, or national origin. Even if your state hasn’t yet, you need to be prepared for this and ensure pay equity within your company. With new state laws come additional risks for business owners.

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The first step toward pay equity is to perform an audit. An audit affords employers the opportunity to examine and document various circumstances which may justify pay differentials.

To begin, start with a diagnostic review of payroll data to see if there are differences between gender and race. Then identify goals: are you trying to reduce risk or is your goal focused simply on paying people equitably?

Next, take a look at those things that might justify salary differentials. Longevity is not one of them unless tied to skill levels. This means you might want to have salary bands with salary ranges for different skill levels; this can help you to justify salary differences.

Lastly, put together corrective actions and preventative measures to avoid issues in the first place. Hiring is often where salary disparity begins. Keep job descriptions updated to ensure that the work being done and the skills required for the position are accurately documented.