Pay equity is a hot issue that can impact morale, engagement, and retention. Don’t wait for a law to address it.
By a 55-vote margin, the U.S. House of Representatives passed the Paycheck Fairness Act (H.R. 7) this week. If passed into law, the bill would prohibit employers from asking job candidates about their salary history and require them to demonstrate definitively that pay disparities between men and women are job-related.
The bill also would amend the Equal Pay Act (EPA) to:
· Forbid employers from asking candidates about salary history or relying on salary history to determine compensation.
· Prohibit retaliation against employees who discuss pay with co-workers.
· Mandate that employees document how any gender pay disparities are job-related and consistent with business necessity.
· Offer individuals who file EPA claims the same remedies that legal remedies as those who file wage-discrimination claims based on race or ethnicity under Title VII of the Civil Rights Act of 1964.
· Simplify the process for people to participate in class-action lawsuits regarding pay discrimination.
· Create a negotiation-skills training program for women and girls.
According to the American Bar Association, “the one substantive change involves retaliation protection and even that provision falls short of what is needed: the new protection only extends to pay conversations that are for the purpose of determining whether the employer is compensating an employee in a manner that provides equal pay for equal work. This restriction could be interpreted to require a worker to use certain magic words when initiating discussions about pay in order to be covered by this provision.”
While HR professionals should familiarize themselves with H.R. 7, it is unlikely to become law anytime soon. Versions of this bill have been floating around for years without definitive action. This specific legislation passed the House mostly along party lines and is not expected to make it through the predominantly Republican Senate.
Regardless of what happens with this bill, it is important to consider how pay disparities may be affecting morale or even turnover at your organization. Ultimately, the wage gap is a real issue and affects nearly all women. For instance, women who never married and have no children are paid 83 cents for every dollar their male peers receive; full-time working mothers get about 71 cents for every dollar working fathers are paid. Full-time working women of color receive less pay than white, non-Hispanic males in comparable positions, although the disparity depends on the woman’s ethnicity.
Some organizations are using pay transparency, open access to information about salaries and pay rates, as a solution to the gender pay gap. The theory here is that when pay is transparent, management must justify each salary, which reduces or eliminates bias.