Corporate Payroll Services

Pay Equity Laws

Employers need to be aware Pay Equity Laws are not new. The Federal Equal Pay Act was passed in 1963. Many states have passed similar laws which have been around for decades. However, enforcement of these state laws is picking up steam, and more aggressive state laws are being passed.

Salary history bans are proactive in creating pay equity. They are intended to break a cycle of underpayment. How much a person is paid, or was paid, may well be part of a cycle of underpayment rooted in their inclusion in a protected class. If employers stop asking for salary history, it is hoped the cycle can be broken.

An employer can ask an applicant for a desired salary because it is not an illegal request, but it might be better if the employer didn’t ask. Let’s say the person you are hiring asks for a lower salary than they deserve because they are used to being underpaid. This information should not cause you as an employer to offer the candidate less than the position’s salary range. Another example: in California an applicant may ask you how much a position pays. You need to provide them a range for the salary, but it does not have to be an exact salary.


The Laws Are Spreading

As of last count, there were 55 pay equity bills pending. This trend will continue and is important to be aware of when hiring new employees. Now would be a great time to do a compensation audit and make sure you are not paying any protected class less than another group of individuals. Check your applications to see if you ask for salary history.

This post is provided by the HR Pros at HR Support Center. When you need essential information on human resources issues, from benefits, hiring and management, to culture, technology and regulations, HR Support Center is a resource on which you can rely.