![](\"https:\/\/s3.amazonaws.com\/snd-store\/a\/71317342\/03_30_22_1267414779_bb_560x292.jpg\")
<\/p>\n<\/p>\n
Pay equity is both required by law and a sound business practice. However, providing equitable compensation to employees who perform the same or similar jobs, while accounting for differences in experience and tenure, isn\u2019t easy. That\u2019s why every company should at least consider undertaking a pay equity audit to assess its compensation philosophy and approach.<\/p>\n
Legal background<\/strong><\/p>\n The federal Equal Pay Act requires employers to provide men and women with equal pay for equal work in the same establishment. The jobs don\u2019t need to be identical, but they should be \u201csubstantially equal.\u201d Moreover, it\u2019s not job titles, but job content<\/em> \u2014 including skill, effort and responsibility \u2014 that determines whether jobs are substantially equal.<\/p>\n Many states have enacted their own equal pay laws, some of which are more stringent than the federal legislation. California, for example, requires employers to pay employees the same wage rates for \u201csubstantially similar work,\u201d a larger umbrella than \u201csame or similar jobs.\u201d<\/p>\n Some other countries have also introduced laws around pay equity. The United Kingdom, for instance, requires some public companies to annually disclose the ratio of their chief executive officers\u2019 pay to the lower, median and upper quartile of their employees\u2019 pay.<\/p>\n In addition to helping to prevent legal woes, pay equity can offer bottom-line benefits. A company\u2019s commitment to equitable pay can enhance its employer brand, boost employee morale and performance, and reduce the risk of negative publicity.<\/p>\n An involved process<\/strong><\/p>\n The purpose of a pay equity audit is to:<\/p>\n Although the process can be quite involved, it\u2019s typically worth the effort.<\/p>\n First, assemble participants from multiple departments \u2014 including HR, legal, and finance or accounting \u2014 to collect data on employee compensation, job classifications and demographics. This cross section of participants also will help ensure buy-in across the business.<\/p>\n The next step is determining how to group employees. That is, which ones will be considered to have substantially similar roles and, thus, should fall within the same pay range?<\/p>\n Some number crunching will come into play. For smaller employee groups, an analysis of, for example, differences in median pay between groups of employees might be enough to identify any unwarranted disparities. With larger groups, you may have to conduct more rigorous statistical analyses. For example, regression analysis can help control for variables, such as employees\u2019 experience levels, when examining disparities.<\/p>\n Critical component<\/strong><\/p>\n Over the past year, many workers have made it abundantly clear that they\u2019ll leave a job if any of several employment components isn\u2019t to their liking. Compensation is certainly one of these. Our firm can help support your efforts to conduct a pay equity audit.<\/p>\n \u00a9 2022<\/em><\/p>\n <\/body> Pay equity is both required by law and a sound business practice. However, providing equitable compensation to employees who perform the same or similar jobs, while accounting for differences in experience and tenure, isn\u2019t easy. That\u2019s why every company should at least consider undertaking a pay equity audit to assess its compensation philosophy and approach. […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7,14,10],"tags":[8,11,12],"class_list":["post-15982","post","type-post","status-publish","format-standard","hentry","category-articles","category-business","category-news","tag-articles","tag-news","tag-updates"],"_links":{"self":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/15982","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/comments?post=15982"}],"version-history":[{"count":0,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/15982\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/media?parent=15982"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/categories?post=15982"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/tags?post=15982"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
\n<\/html><\/p>\n","protected":false},"excerpt":{"rendered":"