Several concepts have become vital parts of the hiring and payroll process for any business, and workplace pay equity is a great example. Ensuring that your company is always fair in terms of compensation to employees who perform comparable work, with no regard to possible biases like nationality, religion or sexual orientation, is vital for several reasons.
At WTA Inc., we’re here to help with a wide range of outsourced payroll services and other HR services for businesses around Salt Lake City, including recruitment and hiring solutions as well. In this two-part blog post series, we’ll look into the vital concept of workplace pay equity – its history and some of the challenges businesses have faced or continue to face in ensuring it, why it’s so important to maintain, and some tactics for employers to ensure pay equity across their entire business.
History of Pay Equity and Legislation in the US
Pay equity is a concept that has received increased attention in recent years, but the concept itself dates back several decades. One of the first significant pieces of legislation addressing pay equity was the Equal Pay Act (EPA) of 1963. This act aimed to eliminate wage disparities between men and women who perform similar work by prohibiting employers from paying women less than men for the same job.
Also important here were legislative actions like the Civil Rights Act of 1964 (particularly Title VII, which prohibited discrimination based on race, color, religion, sex or national origin) and the Age Discrimination Act of 1967, which protected individuals aged 40 or older. However, despite these efforts, wage disparities based on gender, race and age continue to exist in the workplace.
Challenges in Maintaining Pay Equity
One of the biggest challenges for businesses seeking pay equity is identifying and addressing unconscious biases that may affect compensation decisions. Unconscious biases are attitudes or stereotypes that influence our understanding, actions and decisions without us being consciously aware of them. These biases can be based on factors like gender, race, age and other characteristics.
Another challenge is ensuring that job descriptions accurately reflect the work being performed by employees to determine fair compensation. Inaccurate job descriptions can lead to disparities in pay for employees performing comparable work.
Furthermore, businesses must also navigate through various state and federal laws, regulations, and reporting requirements in regards to pay equity. Failure to comply with these laws can lead to legal consequences for the business.
Importance of Maintaining Pay Equity
Maintaining workplace pay equity is vital for several reasons. Firstly, it promotes a fair and just work environment where employees feel valued and respected for their contributions regardless of their personal characteristics. This leads to increased employee satisfaction and retention rates.
Fair compensation also plays a significant role in attracting top talent to your company. When job seekers research potential employers, they often consider factors like diversity and inclusion initiatives and fair pay practices. Companies that prioritize pay equity are more likely to attract top talent and build a diverse workforce.
Lastly, maintaining pay equity helps businesses avoid legal consequences and negative publicity. With increased attention on workplace discrimination and social justice issues, companies that fail to address pay equity concerns may face lawsuits and reputational damage.
In part two of our series, we’ll look at some tactics businesses can implement to ensure pay equity in the workplace. From conducting regular pay audits to educating employees on unconscious biases, there are several steps employers can take to promote fair compensation practices. Stay tuned for our next post!
At WTA Inc., we’re committed to helping businesses navigate through these complex issues and promoting fair compensation practices through our payroll and HR services. Contact us today to learn more about how we can help your company achieve and maintain pay equity.