Why Pay Equality Should Be The Business Standard
Even with numerous employers taking a proactive stance in favor of equal wages for equal work and the introduction of laws that prohibit pay inequality, a gender-based pay gap is still found in workplaces nationwide. Gender-based wage inequalities have been, and will continue to be, important issues employers everywhere must address. In fact, more than ever before, states and cities are beginning to feel the pressure to increase regulations on employers in an effort to resolve pay gap issues among their local businesses.
For employers to address this problem and properly manage it, they must fully understand the causes of wage inequality, what they can do to combat it and the benefits that come from addressing it – as soon as possible. Businesses that rise to the challenge and take steps to address pay inequality in their own back yard will be viewed as industry leaders.
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Pay Inequality Is Real
While different studies offer conflicting reports on the exact size the pay gap between males and females, one thing they do agree on is that the pay gap is real.
Employers point to a variety of factors, including experience, career choice and education level, to explain the pay gap. However, our workforce has made visible changes over the past decades, which rapidly discredit these excuses. Today, according to the U.S. Department of Labor, not only has the percentage of women in the workforce grown to 47 percent, this segment of the workforce are also more educated than previous generations of women workers. Studies find that more women are entering the workforce with college and advanced degrees than their male counterparts. In short, the old excuses for the pay gap no longer hold water.
Even with numerous local, state and federal laws and regulations on the books there are still instances of purposeful and unintentional pay discrimination. As a result, pressure continues to mount on states and cities to pass more aggressive wage laws. Lawmakers are being asked to consider:
- A Federal Standard – To avoid confusion when trying to comply with different regulations at the local, state and federal levels, proponents of more aggressive wage legislation believe there should be a single wage standard among all businesses.
- Safe Harbor – Rather than immediately punishing employers for pay disparities, the law should provide safe harbors in an effort to incentivize self-evaluations and correction of any pay inequality. Employers who take advantage of the safe harbor option in an effort to correct their pay structure should be protected from liability under the law.
- Fair Pay Structures – Employee pay should be determined by legitimate business factors and not on characteristics that don’t apply to the work being done. Additionally, employers should be given a grace period to fix any pay discrepancies at their business.
How To Address The Problem
Business leaders must be well prepared when tackling any issues with regard to the pay gap and the best spot to start is at home.
Take a look at your business’s pay structure to confirm that beginning salary, promotions and other compensation are spread out in a fair and clear way and that this wage progression is well documented. Once your pay structure has been revised and updated, make sure your employees’ wages, male and female, follow your business’s pay regulations. Any pay disparities should be addressed as soon as they’re found. Remember, fixing the problem in the future will cost you much more than it would have cost if you would have just fixed the issue today.
Along with supporting workplace equality and avoiding any legal action from discrimination, employers have other reasons to close the wage gap. By being motivated to achieve pay equity, employers will likely see an increase in employee engagement and productivity. Furthermore, businesses that support and implement a pay equity structure are likely to see positive results with regard to their overall finances as research continue to illustrate that embracing pay equity is good for a business’s bottom line.
If you’re interested in learning more about pay equity, email Rea & Associates for more information.
By Renee West, PHR, SHRM-CP (New Philadelphia office)
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The information presented here is not legal advice. It is for informational and educational purposes only, and is not intended to replace the professional advice you would receive elsewhere. Consult with a human resources professional for additional insight and guidance as well as a trusted advisor who can expertly guide you to the best solution for your specific circumstance.