Do It Right: Legal HR and Payroll PracticesAlthough employers set salaries, they don’t have completely free rein here. They do have to follow federal rules, and there can be serious consequences for violating them. Here are some steps employers should take to make sure that women and other protected classes receive equal pay for equal work.
Know the law
Several major federal laws address pay inequalities. The Equal Pay Act, for instance, requires employers to pay equal wages to women and men performing substantially equal work, while Title VII of the Civil Rights Act of 1964 includes prohibitions against the pay discrimination that happens when women are steered into lower-paying jobs or denied promotions.
Employers should study antidiscrimination laws and review pay policies to make sure they are compensating their employees fairly. Here are some employment practices companies should consider implementing:
- Pick an employee who will be responsible for monitoring pay practices and making sure the company complies with antidiscrimination laws.
- Annually review compensation systems to spot and change potential pay disparities.
- Take a look at all forms of compensation, not just salary. These include bonuses, benefits, training, overtime and separation pay.
- Correct problems as soon as they’re spotted; don’t let them fester.
Another thing to consider is how you match employees to particular jobs. Ask yourself how women and minorities are placed in certain jobs and challenge any assumptions you may be making about what skills and abilities they may or may not have.
Managers should ask themselves these questions:
- Do you seek diversity in your workplace?
- Are your training opportunities gender neutral?
- Do salary and bonus negotiations adversely impact women or minority workers?
- Do all workers have the same opportunities to advance?
Since performance evaluations can affect pay, review your evaluation process to make sure it doesn’t put women and other protected classes at a disadvantage.