Equal Pay and Your Workplace: What Employers Need to Know

Employment Law

Equal Pay and Your Workplace: What Employers Need to Know

Mar 8, 2023 | Employment Law

Equal Pay Day was originated in 1996 by the National Committee on Pay Equity to highlight the gap between men’s and women’s wages. The next Equal Pay Day is March 14, 2023. It symbolizes how far into 2023 women must work to earn what men earned in the previous year.

Equal pay and pay equality have been exceptionally hot topics in recent years, particularly in light of the ongoing fight” for gender equality and the #MeToo movement. It is crucial for employers to understand their obligations when it comes to paying their employees fairly and equitably.

“Equal pay refers to the principle that employees who perform substantially similar work should be paid the same wage, regardless of their sex, race, or other protected characteristic. This principle is enshrined in the federal Equal Pay Act and similar state laws. Essentially, if two employees perform the same job duties and have similar levels of education, experience, and skills, they should be paid the same wage, regardless of their sex, race, or other protected characteristic. This includes not only their base pay, but also their benefits, bonuses, and other forms of compensation.

Pay equality,” on the other hand, is a broader concept that all individuals should have equal access to opportunities – that is an equal opportunity to earn the same wages, irrespective of gender. Pay equality extends beyond equal pay in any particular work setting or job and encompasses persistent biases and other societal pressures, including the lack of affordable child care in the U.S., which continues to fall disproportionately on female workers who are more likely than not to be primarily responsible for the care of their children. 

So why are equal pay and pay equality so important? For one, it is a matter of basic fairness and equity. Employees who perform the same job duties should be paid the same wage, regardless of their gender, race, or other protected characteristic. Additionally, paying employees fairly and equitably can help employers attract and retain top talent, increase productivity, and foster a more positive work environment.

Unfortunately, pay disparities continue to exist in many U.S. workplaces, particularly for women and minorities. According to a 2020 report by the National Women’s Law Center, women typically earn only 82 cents for every dollar earned by men. For women of color, the wage gap is even wider. African American women earn only 63 cents for every dollar earned by white, non-Hispanic men. Latina women earn only 55 cents for every dollar earned by white, non-Hispanic men in the U.S.

So what can employers do to ensure equal pay and pay equality in their workplaces? Here are a few tips:

  1. Conduct a pay equity audit: This involves analyzing your company’s pay practices to identify any disparities in pay based on gender, race, or other protected characteristic. If you identify any disparities, take steps to address them.
  2. Use objective criteria to determine pay: Base pay on objective factors such as education, experience, skills, and job duties, rather than subjective factors such as prior salary.
  3. Be transparent about pay: Make sure your employees understand how their pay is determined and what they need to do to earn raises and bonuses.
  4. Offer benefits and perks that are equally available to all similarly-situated employees: This includes things like flexible work arrangements, paid time off, maternity leave/paternity leave, and professional development opportunities.
  5. Train your managers and supervisors to recognize pay disparities and focus on achieving pay equity: Make sure managers and supervisors understand their obligations under the law and know how to avoid discrimination in pay and benefits.

These are essential principles that all employers should strive to uphold. By paying employees fairly and equitably, employers can create a more positive and productive work environment, while also working toward gender and racial pay equality.

If you have questions or need any assistance concerning guidance around pay transparency in your workplace, please contact Doug Taylor at (703) 525-4000 or rdougtaylor@beankinney.com.

This article is for informational purposes only and does not contain or convey legal advice. Consult a lawyer. Any views or opinions expressed herein are those of the authors and are not necessarily the views of any client.

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