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States and Cities are Taking Pay Equity Laws Into Their Own Hands. Will Your State be Next?

Under the Obama Administration, employers saw the passage of the Lilly Ledbetter Fair Pay Act legislation meant to protect against pay discrimination based on gender.  The Trump Administration, however, has not yet made equal pay a focus of its Administration.  Who knows if it ever will?  In the meantime, what will the states do?

Many states have chosen to take matters into their own hands and made equal pay legislation a priority.  For instance, Washington recently passed legislation which requires similarly employed men and women be paid the same rates.  “Similarly employed” means jobs that require similar skill, effort, and responsibility and are performed under comparable working conditions.  The law also protects transgender workers because it prohibits gaps between genders rather than sexes.

Similarly, New Jersey has passed a bill that makes it illegal for an employer to offer lower pay and benefits to a worker protected by its state law against discrimination, which includes protected classes such as women if they perform substantially similar work to men. Under the law, employers who pay one person more than the other would have to demonstrate how education and experience justify this distinction.

Even cities are getting involved.  Since October 31, 2017, it has been illegal for public and private employers in New York City to ask an applicant’s salary history during the hiring process. The premise behind the law is that pay discrimination is often perpetuated by basing someone’s salary off of a previous, potentially discriminatory, pay rate.  Connecticut has a similar law which will likewise bar employers from asking about a prospective employee’s wage and salary history, effective January 1, 2019.  In essence, these laws work to eliminate the compounding effect of prior discrimination.

These types of equal pay laws are sweeping the nation.  Therefore, employers would be wise to get ahead of the avalanche that will inevitably ensue if their state or locality decides to pass a similar law.  A good place to start is a pay equity audit.  This allows employers to assess not only their potential exposure to the extent there are pay disparities but also allows employers to identify what departments and groups are the biggest offenders.  This knowledge allows human resources to standardize pay increases and identify problem areas.  HOWEVER, before you do this audit, be sure you are ready to follow up on the results.  While an audit can help you improve your operation, it can also kill you if you find there are disparities but the cost to correct them is prohibitive.  If this is the result, you never should have done the audit.  To control your risks, you should work with legal counsel to help create a privilege that might keep the results of the audit confidential and to ensure your analysis is legally justified.

Brody and Associates regularly advises management on complying with state and federal employment laws including equal pay laws.  If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560.