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Pay Equity: Trends and Compliance

Equal pay laws on both the federal and state level have been around for some time, starting with the Federal Equal Pay Act of 1963.

In the past few years, we have seen a renewed focus on this area to close the pay gap on the basis of gender or ethnicity. While efforts on the federal level have not resulted in new legislation, the issue has been taken up on the state and local level, resulting in updated pay equity laws.

More than 20 states in 2018 introduced some type of pay equity legislation. In the northeast, the Massachusetts law,An Act to Establish Pay Equity,” took effect July 1, 2018. It prohibits discriminating against employees because of their gender when deciding and paying wages. Under this law, employers cannot pay workers a salary or wage less than what they pay employees of a different gender for comparable work. It also includes a ban on salary history inquiries, prohibiting the seeking of salary or wage history prior to making a job offer that includes compensation, and prohibiting the requirement that a prospective employee’s wage or wage history meet certain criteria. This new law also addresses pay transparency: employers may not prohibit employees from discussing or disclosing their wages. Some states’ bills have focused on only one of these areas—pay transparency or bans on salary history inquiries.

In general, new state and local pieces of legislation include provisions to:

  • Ban or restrict salary history inquiries
  • Enhance pay transparency
  • Expand the “equal work” standard.

Employer Action and Guidance

Employers should ensure they are in compliance in states and localities where legislation has passed, and take steps where required, such as:

  • Removing salary history inquiries from job applications and in the applicant screening and interviewing process.
  • Review and update policies on pay transparency.
  • Review general employee compensation to determine where pay inequalities may exist, with outside guidance recommended.

For More Information and Assistance

KMA can help you be informed and fully prepared for these changes. We can review your policies and employment application and do a full assessment of your employee compensation. Contact us today at info@kmaconsultingllc.com to discuss all the ways KMA can help mitigate risk and alleviate your pressure points.

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