As we commemorate Women’s History Month, one issue that is top of mind for many employers is the increased focus on the gender pay gap. As a management-side labor and employment attorney, I have witnessed the importance of implementing effective strategies to achieve pay equity and reduce the risk of noncompliance with the evolving legal landscape of pay equity laws.
Numerous state and local jurisdictions have introduced a flurry of laws in recent years aimed at addressing the difference in earnings between men and women. According to the latest data from the U.S. Census Bureau, women earn, on average, 84 cents for every dollar earned by men. This disparity is even more pronounced for women of color, with African American women earning 69 cents and Latina women earning 57 cents for every dollar earned by white men.
Though these pay gaps may be inadvertent, they pose significant legal risk for employers that have not identified and remediated them. Fortunately, there are steps employers can take to reduce their legal risk.
Pay Equity Analyses. One key strategy to reduce legal risk is conducting a pay equity analysis. A pay equity analysis can help employers identify potential patterns of pay disparity across not only genders but also age, race and other protected classes. However, pay equity analyses are not without legal risk, because in certain circumstances they may be used as evidence of pay discrimination. Therefore, employers should work with experienced employment counsel to structure the analysis and develop practical solutions to remedy tactfully any adverse findings.
Pay Transparency. Keeping abreast of recent pay transparency legislation and enforcement actions is critical to preventing claims of gender-based pay discrimination. While most employers are aware of their compliance obligations with respect to federal laws, such as the Equal Pay Act and Title VII of the Civil Rights Act, several state and local governments have implemented their own pay equity laws and initiatives aimed at closing the gender pay gap and promoting fair pay practices.
To date, approximately 10 states have enacted pay transparency laws, and approximately 15 have proposed pay transparency legislation.These pay transparency laws require employers to disclose certain salary- and benefits-related data in their external, and sometimes internal, job postings. Some states have additional reporting requirements that place added checks on employers and may pose traps for the unwary. While compliance with varying pay transparency laws can pose administrative hurdles for multistate employers, particularly with respect to remote work, doing so can close off pay discrimination claims, increase pay equity and, ultimately, increase employee retention.
Diversity & Inclusion Initiatives. Aside from required legal compliance, diversity and inclusion initiatives are valuable recruiting and retention tools that help to create atmospheres free from discrimination and harassment. However, recent precedent has ended affirmative action in higher education, and reverse discrimination claims have become increasingly common. Therefore, employers should consider working with experienced employment counsel to review their current diversity and inclusion initiatives for compliance and to restructure such programs to minimize legal risk while increasing retention and ascension of women in the workplace.
Education & Training. Education and training are also critical components of efforts to minimize the risk of gender-based pay discrimination claims. Employers should consider providing training to managers and HR professionals on topics such as unconscious bias, gender equity and fair pay practices. By raising awareness of the factors contributing to the gender pay gap and providing tools and resources to address them, employers can insulate themselves from sex and gender discrimination claims, including those based on pay.
By implementing strategies such as conducting pay equity analyses, complying with relevant laws and regulations, promoting transparency and accountability in pay practices, prioritizing diversity and inclusion initiatives, and providing education and training, employers can better insulate themselves from the unintended consequences of unidentified pay disparities.
As we celebrate Women’s History Month, let us recommit ourselves to ensuring gender equality and pay equity in the workplace.
Mariah Berry is a board-certified attorney at Muskat Devine, a management-side labor and employment law firm in Houston.