April 13, 2018

A Changing Pay Equity Landscape

by Samuel Lillard, Fisher Phillips LLP

In recent years, pay equity has been at the forefront of our national conversation about the workplace. Ohio, in particular, has one of the largest gender wage gaps.

Women in Central Ohio earn just 78 cents to every dollar earned by a man, with women of color seeing an even greater disparity. This puts Columbus even lower than the national average. Despite this, women are participating in the workplace at a rate of 63 percent and make up just over half of our population locally.

Both federal and state laws prohibit pay discrimination on the basis of sex. Under the Equal Pay Act, employees must receive equal pay for equal work. To add to the concern of lawsuits, a rise in pay equity laws has created compliance challenges for employers, as each new law and jurisdiction has its own set of rules. Some states have even passed laws that prohibit, or limit, an employer from seeking salary history from applicants. The rationale is that low pay can follow employees throughout their careers, resulting in a systemic reduction in their earning power.

To help employers navigate and comply with this growing patchwork quilt of pay equality laws, Fisher Phillips recently launched its own interactive pay equity map, a web-based tool that allows employers to explore state- and city-specific pay equity laws by clicking each state on the map.

So, how can employers stay out of the legal fray and help close the pay gap within their own workforce? First, they should stop requesting salary histories from applicants and, instead, ask applicants about salary expectations and provide a salary range for open positions. Next, employers should conduct an audit to identify any existing pay gaps and determine whether corrective action is necessary. In addition, employers should review their existing pay policies regarding how compensation decisions are made, including any factors that could result in pay disparities. This could involve factors like business mergers, department acquisitions or cost-of-living differences. If experience is a guide, these audits often will yield pay disparities. Of course, many are based on legitimate justifications. For those that defy legitimate explanation, however, a corrective action plan should be developed.

Although it will take time to close the gender wage gap, employers can use these proactive measures to help bring about more objective pay practices and promote equal opportunities for their employees – ultimately, leading a more engaged workforce.