In 1963, John F. Kennedy signed the Equal Pay Act (EPA) into law — landmark legislation designed to ensure men and women receive equal pay for equal work. The EPA generally prohibits employers from paying women less money than men for doing substantially the same work. Title VII of the Civil Rights Act of 1964 soon followed the EPA, which provided additional federal protections and remedies for workplace discrimination, including sex discrimination. Since then, other laws and lawsuits have been paving the way for more equitable pay for women in the workplace, including the Lilly Ledbetter Fair Pay Act of 2009, which addressed the timelines under which wage claims can be filed. This act allows women to more effectively challenge the current effects of past wage discrimination.
Notwithstanding the pay equity laws on the books, there appears to be a persistent pay gap among the wages of men and women in the United States. According to recent numbers released by the Bureau of Labor Statistics (BLS), full-time female employees currently earn about 81% of what full-time male employees earn. This disparity in pay appears to be amplified when we review pay among different demographic groups. For example, according to a National Women’s Law Center fact sheet, “The Wage Gap: The Who, How, Why and What to Do,” African American and Latina women earn about 63 cents and 54 cents respectively for every dollar earned by white, non-Hispanic men.
Given that almost 47% of U.S. workers are women, pay equity and potential wage discrimination will continue to be a significant issue for many American employers.
Some states and municipalities have decided to take additional action to address gender pay inequity. Some of these newer laws have been designed to combat systemic pay inequity at the time of hire.
These so-called “salary history bans” prohibit employers from asking job applicants about their past salary history. Others seek to ban employers more broadly from using an applicant’s salary history to set their wage rates — even if the salary history is volunteered or inadvertently discovered.
The public policy behind the rule is a simple one — preventing new employers from taking past salary history into account will help to break the cycle of systemic pay inequity. In other words, each time an applicant changes jobs, the applicant’s prior inequitable or discriminatory pay won’t follow them from job to job.
States that have recently passed this type of law for some or all employers in their jurisdiction include California, Connecticut, Delaware, Hawaii, Massachusetts, Michigan, New Jersey, New York, Oregon, and Vermont, as well as Puerto Rico.
These laws do vary so care must be taken to review applicable state or municipal laws and adjust as needed. Employers subject to one or more of these laws should examine their recruiting processes and application forms to ensure that prohibited inquiries are not made on the application or during the recruiting process.
Because of the increased scrutiny and interest in pay equity, some employers are considering more proactive measures. You can start by reviewing your pay structure and policies on setting starting pay, merit pay increases and promotional pay increases. Smart use of technology can aid you in this process. For example, the use of data analytics through an HR technology platform can highlight wage gaps in your organization. In addition, you can use talent management technology to define metrics and measure employee performance which can then be built into a compensation scale. The compensation scale adds consistency and visibility to the wage setting process, making it less likely that a manager will set a salary too low or too high.
Likewise, technology can also assist your hiring managers with salary history ban compliance. Applicant tracking and recruiting technology can support the interview process by providing guidance on application questions and salary conversations. Your managers can then follow this workflow and avoid asking prohibited questions.
Most people agree that closing the wage gap is the right thing to do. To learn more about how you can address pay equity in your organization or for more information on how technology can assist you in addressing pay equity, please contact us.
Janice Pintar has extensive litigation experience in the field of employment law and was a plaintiff’s attorney for nearly thirteen years before becoming an HR Consultant in 2015. She educates and advises human resources professionals and employers on a broad range of
Janice Pintar has extensive litigation experience in the field of employment law and was a plaintiff’s attorney for nearly thirteen years before joining Associated Financial Group’s HR Consultants in 2015. She educates and advises Human Resources professionals and employers on a broad range of employment issues and best practices and costly litigation compliance topics including respectful workplace practices, unlawful harassment avoidance, wage and hour issues, medical leaves and accommodations, as well as federal and state discrimination and anti-retaliation issues. Janice received her undergraduate degree from the University of Wisconsin-Milwaukee, magna cum laude, and her law degree from the University of Wisconsin, cum laude.
On May 11, 2014, the governor of Minnesota signed the Women’s Economic Security Act (WESA), a bill that will require Minnesota employers to make dramatic changes to their employment policies and practices.
While WESA directly impacts employers who conduct business in Minnesota, the changes follow plans by federal and local governments to expand legal protections for women and other employees. For this reason, employers in other jurisdictions should pay close attention to these national and state law trends.
“The only thing that is constant is change.”
Turns out that dusty old Greek philosophers occasionally say profound things (Heraclitus also said that a man’s character is his destiny). And since the Greeks are considered the fathers of democracy and were responsible for no small number of laws themselves, it seems an appropriate departure point to talk about the constantly changing landscape of employment laws.
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