Lessons for Business Owners from Equal Pay Day
March 15, 2022, marked this year’s Equal Pay Day. This day symbolizes the date to which women must work in order to earn what men earned the year before. On average, women statistically earn less than men, despite the fact that the Equal Pay Act of 1963 has long required men and women who perform substantially equal jobs to receive equal pay.
Equal Pay Day was created to illustrate the fact that women must work more hours for the same amount of pay. Although Equal Pay Day is largely symbolic, it represents a genuine concern for today’s business owner. Ensuring pay equity is more important than ever, particularly with emerging trends that strengthen equal pay protections and remedies in state and local legislation.
What is Equal Pay Day?
According to the U.S. Census Bureau data on median earnings for full-time, year-round workers, women earned 83 cents for every dollar earned by men in 2020. And the pay gap is even more significant for women of color when compared to white men.
Because of these discrepancies, the National Committee on Pay Equity (NCPE) founded Equal Pay Day, originally known as “National Pay Inequity Awareness Day,” in 1996. The NCPE started Equal Pay Day as an event to raise public awareness about the gap between men and women’s wages.
The Future of Equal Pay Legislation
On March 14, 2022, President Biden issued a proclamation in recognition of this year’s Equal Pay Day. In this statement, he repeatedly urged Congress to pass the Paycheck Fairness Act, which was first introduced in 1997 and has failed to pass multiple times, most recently in June 2021.
If passed, this legislation would limit the “factor other than sex” defense that employers often use to defend pay discrepancies under the Equal Pay Act. The Paycheck Fairness Act would restrict this defense to bona fide, job-related factors such as experience, education, or training. The Act also prohibits retaliation against workers who discuss pay or disclose their salaries and strengthens available remedies for workers who experience wage discrimination.
In addition to the Paycheck Fairness Act, many state and local legislatures have passed laws that address the issue of equal pay. Some of their legislative efforts include:
Requiring employers to disclose salary ranges in job postings
Prohibiting employers from inquiring about the salary history of a job applicant
Prohibiting employers from retaliating against employees who disclose their salary
An asset management firm, known as Mercer’s Law and Policy Group, has published a comprehensive list of resources about state equal pay laws that you can use to learn more about the laws in your state. However, regardless of what your state requires, businesses should remedy any sex-based pay discrepancies that exist in their workforces sooner rather than later.
The Importance of Pay Equity Audits for Businesses
Conducting a pay equity audit is essential for an employer who wishes to address a potential pay disparity. Not only can a pay equity audit reveal whether any sex-based pay disparities exist, but audits can also help determine if the disparities can be explained by legitimate business justifications other than sex.
A pay equity audit can also identify any trends in where the pay equities exist. For instance, are disparities only found in a particular business unit, location, or pay grade? Understanding if and where the problem exists is a vital step in remedying it, and a detailed pay equity audit can point you in the right direction. Your business attorney can assist you in conducting an effective and focused pay equity audit.