Pay Fairly and Legally

“It’s time to review my employees, including their wages. How do I stay compliant with the equal pay laws?”

Your HR Survival Tip

There are state and federal laws focused on ensuring employees doing similar work with similar skills are paid fairly. This began with women being paid less than men but the laws have expanded considerably and make us look beyond gender differences.

Since fairness is the basic principle, always keep that in mind. Any differences in wages should be easily justified by a job-related reason, such as:

• Seniority – The employee has been doing this type of work longer.
• Merit – The employee is better at the job.
• Productivity – The employee is faster or produces higher quality results in the same amount of time.
• Demographics – The employee is working in one of your locations with a higher cost of living (per official cost of living charts).
• Education – The employee has more job-related education or training.

Have you ever paid a new employee more than you expected just because it was really hard to fill that position? No more. Paying more simply because it was hard to fill that position means your other employees in that position aren’t being paid enough.

The latest law makes us look further into our companies. Do you require a warehouse manager to have 5 years of experience, 1 year of supervisory experience, and the training and knowledge to do their job? If you have a manager in another area of your company with those same requirements, now you also have to make sure those two managers are paid equitably. Yes, the law now makes you look at different positions with similar skills to justify you have a reason for different wages.

It’s hard to look at making pay changes when the minimum wage keeps forcing you to pay more already. However, now more than ever, you want to be able to justify any differences in wages across your whole company. Can you state exactly why Sam is making 10% more than Sue?