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How Does Fair Pay Apply to Your Company?

Written by Mark Szypko, CCP, GRP

February 3, 2017

How Does Fair Pay Apply to Your Company Hero

If you’re in compensation, you’ve probably come across the widely reported 80% statistic (a woman makes 80% of what a man makes in the same job). But fair pay is about much more than closing the gender pay gap. Fair pay applies to all protected classes and groups, including race, religion, age, gender, and disability status to name a few.

The concept of fair pay is a hot topic in compensation, but no drastic drops in the gender pay gap have been recorded recently. Many companies, however, are taking strides to ensure they’re paying fairly and resolve issues relating to unfair compensation. For your company to stay ahead of these issues like the companies from the hyperlink in the previous sentence, you need to be diligent about staying on top of all fair pay rules and regulations.

Fair Pay Legislation

To help you with this cumbersome challenge, here are a few of the key federal laws that apply to fair pay:

The Federal Equal Pay Act

The Equal Pay Act of 1963 is the landmark federal law that governs fair pay. It remains a part of the Fair Labor Standards Act, and requires most employers to pay the same compensation (regardless of gender) for the same or similar work. This law has broad definitions for “compensation” and “similar work” – defining “compensation” as wages, overtime pay, commissions, bonuses, vacation pay, holiday pay, and benefits, and “similar work” as work that requires similar skill, effort, and responsibility, performed under similar working conditions.

Federal EEO Laws

These laws include Title VII, the ADA, the ADEA, and the Rehabilitation Act. They provide broad protections against discrimination based on a protected class in any aspect of employment. Some of the protected classes are listed above, but the longer list includes age, gender, race, color, national origin, ancestry, pregnancy, childbirth, medical condition, marital status, physical or mental disability, religion, sexual orientation, and/or sexual preference. For federal employees and contractors, political affiliation is also protected.

Under the EEO laws, people getting paid different rates for similar work may be a form of discrimination (if the discrepancy is because of a protected factor). As an employer, you should make sure that any pay differences can be justified by either affirmative defenses or the general EEO defense of a “legitimate nondiscriminatory business reason”.

How can My Organization Maintain Fair Pay?

CompAnalyst, a compensation software platform from Salary.com is positioned to help all organizations stay on top of all pay practices relating to pay equity. The tool uses visual reports backed by Tableau to give compensation teams the visibility and organization they need to stay on top of their entire comp strategy. One specific report, the Gender Pay Analysis, gives you an instant visual representation of your company’s pay practices broken down by gender. This puts your team ahead of any legal claims that could arise because of unfair pay practices. If there’s an issue, your internal team will be the first to know and will have time to correct any inconsistencies.

Embracing Fair Pay in the War for Talent

Download our white paper to further understand how organizations across the country are using market data, internal analytics, and strategic communication to establish an equitable pay structure.

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