Today is “Equal Pay Day” in the United States, a symbolic date used to focus attention on gaps that exist between men’s and women’s wages. Current estimates show that women still only earn 82 cents for every dollar a man makes. While there are various opinions about the pay gap and what it means, today is not a day to celebrate; rather it is a day for honest reflection. Ask the question: is your pay system equitable?
While reflecting on Equal Pay Day, also ask, what can employers do? Treat pay equity as a business imperative and do a deep dive on pay systems and data. Start with a privileged pay analysis. This provides maximum protection for both the process and results. A privileged pay analysis can provide information necessary to identify disparities and diagnose why they exist, and affords an opportunity to fix them. There may be perfectly legitimate and lawful reasons for pay differences based on education, experience, job scope or tenure, among many other factors. Each employer values different elements. Some value education level more than experience and vice versa. A pay analysis shines a light on disparities and points out areas requiring further examination.
Pay equity analysis results are often surprising, even in the best-run organizations. If an analysis confirms equitable treatment, it may be advantageous for talent attraction and retention to share the findings with employees or the public. Good results may also have a positive impact on the organization’s reputation.
If, however, the pay analysis discloses issues, focus and start working to understand why. What is the data saying? Are there systemic reasons (starting salary, merit increases, gender channeling) causing the gaps? Alternatively, are there simpler, non-systemic reasons–a few key outlier hires for example? Remember, every hire, discharge, promotion or demotion changes the pay data and the comparisons.
Organizations that decide to conduct a privileged analysis will be in complete control of any pay adjustments and timing – not a government regulator, plaintiff’s class action law firm, shareholder activist or employee group. Do not underestimate the value and flexibility this provides as an incentive to act. Those thinking their pay system and decisions are beyond reproach should be congratulated as one of the select few. For everyone else, however, it is better to understand the landscape now, because that which is unknown can hurt. Why not use Equal Pay Day as a starting point.
Epstein Becker Green has the experience and resources to help organizations on their pay equity journey. Please reach out to the author or your Epstein Becker Green attorney for assistance.