Addressing the Gender Pay Gap: A Guide to Equal Pay Audits
Understanding the Gender Pay Gap: The Importance of Equal Pay AuditsIs there a gender pay gap in your organization that requires attention? While most employers do not intentionally engage in gender-based pay disparities, discrepancies can still emerge. This can particularly occur when employees join at different times with varying negotiated compensation and benefits, or due to unintended consequences of bonus policies. Undertaking a thorough equal pay audit in accordance with the Massachusetts Equal Pay Act can shield employers from wage discrimination claims. While this advantage is not explicitly stated in federal law, conducting an audit can still yield significant benefits.
What is an Equal Pay Audit?An equal pay audit, as defined by Massachusetts law, is a diligent self-assessment of compensation practices and pay fairness. The primary objective of the audit is to determine if the organization is providing equitable compensation to both men and women for similar job roles.
How Can the Audit Identify Wage Gaps?To identify wage disparities, examine the compensation of employees whose roles require substantially similar skills, effort, and responsibility, performed under comparable working conditions. Exact job titles need not match. Evaluate the entire compensation package, encompassing base salary, bonuses, and incentive payments. It's important to also scrutinize hiring practices, considering that in Massachusetts, it is unlawful to inquire about a candidate's salary history, as this can perpetuate wage gaps.
If discrepancies in pay for similar roles are discovered, assess whether these variations can be justified. If not, take steps to make "reasonable progress" in resolving these issues, which will safeguard your organization under state law. Why Should You Conduct an Equal Pay Audit?When conducted correctly, an equal pay audit can establish a robust defense against claims under Massachusetts equal pay regulations, providing protection against liability even if an employee can demonstrate a pay equity violation. While this may not serve as a defense for federal claims or other statutes, it can significantly bolster your position in such cases.
Who Should Perform the Equal Pay Audit?While there is no strict requirement to engage an attorney or an external firm, it is a prudent choice. An external perspective can offer an unbiased assessment of legal standards and fresh insights into your business practices. Furthermore, external experts can provide valuable testimony during litigation if necessary. Collaborating with an employment lawyer can provide additional benefits by identifying and proactively managing other employment law risks.
What If an Employee Raises Concerns About Pay Inequity?In the event an employee voices concerns during an audit or separately, it is imperative to consult with an attorney immediately for legal guidance. Equal pay laws explicitly prohibit retaliation, and no punitive actions should be taken against employees for discussing compensation matters amongst themselves. Additionally, these laws affirm the right of employees to discuss their compensation with one another, thereby promoting transparency in the workplace.
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