UPDATE: All of our latest thinking can now be found at rewards.aon.com/insights. To read our latest articles, please click here.
Eliminating pay inequities based on gender, race, ethnicity, and other protected statuses is a major topic of conversation across all types of organizations — and for good reason. In addition to maintaining compliance, employers are now motivated by many other factors to close any existing gaps, including the advent of technologies that drive increased pay transparency, clear links between diversity and improved business performance, protecting brand reputation, and growing societal pressure. In sum, addressing inequities and remaining competitive in today’s challenging talent market now go hand-in-hand.
However, the growing patchwork of pay equity laws across the U.S. does not necessarily make it easy for companies to drive change on a consistent basis. In fact, 42 states in the U.S. have expanded upon the federal Equal Pay Act of 1963 to develop various regulations designed to better safeguard the categories listed above. To remain on top of existing and emerging legislative actions, companies must think in a more holistic fashion and create consistent approaches to their compensation structures and systems grounded in broad principles of fairness and backed by deep local expertise.
This is especially true for companies with employees in multiple states that are covered under different laws. In such cases, firms must remain compliant while also determining if it makes sense to apply certain legal standards to all employees to create consistency in pay and hiring practices across the organization. For example, as we covered in our recent article, Equal Pay Laws Shine a Light on the Difficulty of Defining “Equal,” the California Fair Pay Act highlights the challenge of navigating the many legal definitions of fair pay compared to taking a statistical or pragmatic approach to eliminating unexplained pay gaps within an organization.
While states and smaller jurisdictions are constantly passing new pay equity laws and modifying existing ones, some of the strongest state laws today are in California, Colorado, Louisiana, Massachusetts, New Jersey, New York, Oregon, and Pennsylvania. In this article, we summarize key takeaways of each of these state laws to provide a guide for navigating the current legislative landscape and to see where future pay equity regulation may be headed in other jurisdictions throughout the U.S. Taking these laws into account can help organizations think through the right areas to drive firm-wide consistency, while also remaining compliant with key local regulations.
Please click here to read the full article.