Recent legislative actions at the federal and state level have brought renewed attention to the issue of compensation discrimination. From the EEOC publishing a new action plan on pay data collection to several states enacting new or revamping existing equal pay laws, closing the gender wage gap has become a nationwide priority. With this increased focus on combating wage discrimination and pay inequality at both the state and federal levels, employers should take the following steps to minimize the risk of a pay discrimination claim:

  1. Eliminate policies that prohibit employees from discussing wages – such policies are unlawful under the NLRA and many state laws.
  2. Develop a policy prohibiting wage discrimination for all employees and train supervisory employees on making employment decisions based on legitimate non-discriminatory criteria (e.g. merit, skill and performance).
  3. Carefully document all employment decisions relating to employee compensation and state the legitimate, non-discriminatory factors taken into account when making the decision.
  4. Regularly review and audit your pay practices to make sure wage discrimination is not occurring.

This does not require a great change for most of you out there.  However, you must be able to defend your neutrality when it comes to raises and pay for certain jobs.  You cannot forbid employees from discussing how much they make.  If confronted by an employee, give them a truthful answer.  If you do not think they are as good of a worker as this employee, tell them.  Be honest.  Don’t say that the other person is paid more because they need it for their family.  That is not a business reason.  Pay should be based on productivity and skill level not need.

As always, if you have a question about paying your employees, call HR Mobile Services, Inc. at (559) 625-2322.