Equal Pay Act and What Is Trending
It’s the unfortunate truth. In most workplaces, female employees make significantly less than their male counterparts.
In fact, the ratio of women’s to men’s median weekly earnings for full-time wage and salary workers in all occupations was 81.9% in 2016. Yet 42% of women are the family’s primary breadwinner.
Equal pay for equal work is necessary for these women to support their families.
But it’s more than a social necessity. It’s the law. The Equal Pay Act was signed into law by John F. Kennedy in 1963. The Act contains federal law prohibiting pay discrimination by gender.
As an employer, it’s crucial you understand both the Equal Pay Act and the laws for your company’s state(s).
Read on for our guide to the Equal Pay Act and current trends in the law.
Equal Pay Act
The Equal Pay Act states that no employer may discriminate based on gender. Equal or similar work requires equal pay. There are only a few exceptions, such as a merit or seniority system.
Further, an employer can’t reduce employee wages to comply with the law.
Employers should also be careful about other workplace rules that could lead to gender discrimination. For example, some employers have been sued based on discriminatory dress codes.
Trending Now: Salary History Ban
In addition to federal and state laws, some cities and counties are enacting their own compensation related laws. Not knowing all the laws could cost you thousands of dollars.
Until a couple of years ago, most states applied the Equal Pay Act alone. But states are now passing their own laws.
A trend currently making headway is the salary history ban. The Equal Pay Act does not prohibit employers from asking about an applicant’s salary history.
But states are now passing laws prohibiting employers from asking this type of information.
It makes sense. If a woman’s pay was less due to gender discrimination, then basing her future pay on past wages perpetuates the pay disparity. Past pay shouldn’t dictate future wages in a new position.
Another trend is pay transparency. Many employers prohibit employees from discussing salaries. The National Labor Relations Act (NLRA) already discourages employers from such policies.
However, new state laws are strengthening the NLRA. Think twice before enacting prohibitions that keep your employees from discussing their pay.
California, New Jersey, and New York are a few of the states with recent pay transparency laws.
Broadening the Law
It’s also harder to justify unequal pay as laws broaden pay discrimination definitions. The Equal Pay Act demands equal pay for jobs “similar in skill, effort, and responsibility.”
New laws in some states now define equal work as “comparable work” or “work of comparable character.”
Know the Law
Ignorance isn’t a defense! As an employer, you are responsible for knowing the Equal Pay Act. Make sure you know the state laws as well. If you haven’t audited your pay practices in a while, now’s a good time.
Don’t wait until you’re faced with a gender-discrimination lawsuit to adjust employees’ pay. Make sure you’re in compliance with the law.
Interested in learning more about the Equal Pay Act? Need assistance implementing the various rules and regulations within your business? Contact the professionals at GIGA Solutions.
Our PEO and HR Outsourcing Brokerage helps business owners gain access to guidance and HR support, assistance with employment law, and employment liability coverage and management.
The team will also craft tailored HR outsourcing plans for businesses that can save time and money by outsourcing their HR and administrative tasks.