Although the Lilly Ledbetter Fair Pay Act now is four years old and the Paycheck Fairness Act has been reintroduced in Congress, a wide pay gap still exists nationally. While PFA legislation has little chance of passing the Republican-controlled House, according to Jones Day partner Alison B. Marshall, she warned employers to remain vigilant about pay equity.
“The administrative agencies are not sitting back; they’re pressing ahead,” Marshall said in Washington, D.C., on Tuesday at the Society for Human Resource Management’s 2013 Employment Law & Legislative Conference. Despite congressional inaction on fair pay, she said federal officials at the Office of Federal Contract Compliance Programs and Equal Employment Opportunity Commission are “looking at these bills that are introduced, and [are incorporating] pieces of them” into compliance regulations.
The agencies are beefing up pay equity enforcement, in many cases being proactive about guidance and regulations and not waiting for new laws. No charge needs to be filed before the EEOC launches an investigation into fair pay, Marshall warned. In addition, the agency, as part of President Obama’s task force on the issue, already is implementing pilot projects to audit employers near New York, Chicago and Phoenix.
“They’re [saying to employers], ‘We’d like to come and meet with you about your compensation practices,’” Marshall said, adding that the EEOC has investigative authority regarding employers’ compensation practices and officials are well within their bounds to issue a request for information. “If you fail to produce it,” she said, “they can go the subpoena route.”
Obeying the Equal Pay Act — a 1963 amendment to the Fair Labor Standards Act, prohibiting employers from gender discrimination when paying wages — is not necessarily the same thing as obeying Title VII, which prohibits employment discrimination more broadly, Marshall said. Compliance in both areas requires constant vigilance, as disparities may exist across geographic locations or between contractors and employees, she noted.
The most important compliance practice employers can conduct is launching pay equity studies, comparing internal findings against market data, according to Marshall. She also recommends reviewing manager training under the compensation system. “Anything that would affect that compensation,” is a factor, Marshall said, including opportunities for work that can lead to higher pay.
Beware counteroffers used to retain high-valued workers, for instance, that could create a bad comparator for a lawsuit. If one employee’s compensation reflects a special or rare skill, make sure it is documented. Also, hiring at different salary levels based on education or experience is par for the course, Marshall said, but if performance reviews and workloads for two employees remain the same, their pay eventually should level out, regardless of who was originally hired at higher pay.
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