Pay equity is a topic of growing importance – made even more important by new pay equity laws in states like California, Massachusetts and New York.
Yes – Several states as well as the federal government, have long had laws banning employers from paying women less than men for the same job.
But the new California Fair Pay Act however significantly raises the stakes by saying employers may not pay employees less than those of the opposite sex for “substantially similar work,” regardless of title or work site.
In California for example, a female store clerk may challenge a male clerk’s higher wages at a store owned by the same company but located a short distance away. Or a female maintenance worker who is responsible for keeping a warehouse floor clean may challenge higher wages paid to a male janitor who cleans the lobby and offices.
What’s more, the Equal Employment Opportunity Commission (EEOC) is having employers with 100 or more workers submit salary data along with their EEO-1 reports. The new rule applies to 2017 EEO-1 reports, which will not be due until March 31, 2018. Shareholder initiatives are also putting pressure on large publically traded companies to report pay equity to shareholders annually. Smaller employers also should consider insuring that their salary data does not show differences in pay between women and men for substantially similar work, in advance of any further requirements that may be forth coming.
So where does all of this leave employers in Connecticut?
These changes should be a wakeup call for employers.
As far as Connecticut law is concerned, the legislature recently passed (2015), and the Governor signed, a law concerning pay equity and fairness. The law encourages wage transparency by barring employers from prohibiting employees from voluntarily discussing their wages with other employees and/or with third parties.
Similar laws have also recently been passed in Massachusetts and New York. For example, under the Massachusetts Pay Equity Act, which is scheduled to take effect in 2018, employers shall be prohibited from screening applicants based on their previous salary or asking salary related questions until after an offer is made. Additionally, Massachusetts employers will be barred from contacting an applicant’s former employer to discuss their wages until after an offer is made and only then, with written permission from the applicant. Further, under New York’s recently passed law, employers shall be required to justify pay differentials based on a limited number of factors, such as: (1) a seniority system; (2) a merit system; (3) a system that measures earning by quantity and quality of production; or (4) a bona fide factor other than sex (i.e., education, training, experience, etc.). New York employers also may not prohibit employees from inquiring about, discussing, or disclosing wage information.
What does all this mean?
If you are an employer in Connecticut, particularly a large employer, you may want to consider conducting a pay analysis for your company.
It’s a good idea to have an attorney conduct that analysis so the data is protected under attorney-client privilege.
What should you do if you discover you have problematic pay standards? Be prepared to act.
If you’re an employer and have questions about pay equity issues or would like to talk about a pay audit, consider calling on the attorneys at Kainen, Escalera & McHale in Connecticut. We do one thing and one thing only – we are an employer defense law firm – in fact, we are one of the largest employer defense law firms in the region. What’s more, each of our attorneys have over 20 years of experience in employment and labor law matters and can provide your business with comprehensive legal counsel ranging from assistance with necessary preventive measures to trial advocacy. Please contact us if we can help you.
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