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Women make up almost half of the workforce. They are the equal, if not main, breadwinner in four out of ten families. They also receive more college and graduate degrees than men. However, it is still evident today that women only earn about 79% of what men earn. (Source: iwpr.org)

To some, it may seem as though the impact of the Equal Pay Act of 1963, which made it illegal to pay women lower wages because of gender, may have weakened over time. According to the WAGE Project, Over her working life, a woman will earn $1 million less than a man simply because she is a woman.

With growing controversy centered on closing the pay gap between men and women, its crucial to make sure that employers are maintaining fairness when setting pay for their employees.

As a first step, employers can review their pay practices to find any imbalances. The National Committee on Pay Equity recommends that companies audit themselves to see how diverse and balanced their practices truly are:

  • Are diverse applicants included in the recruiting process?
  • Does your compensation system lead to internal pay equity?
  • Is your employee pay competitive with industry standards?
  • How does pay compare for positions with similar duties or qualifications within the company?
  • For new employees, are men more often able to negotiate higher starting salaries than women or minorities? 
  • How are raises or opportunities for promotion earned?

As a general rule, pay should be set based on factors such as years of experience, education, job performance, the number of employees managed, professional accreditations, industry, and the job at hand. Factors such as gender, age, race, nationality, or disability (among other protected areas) should not be considered when setting an employee’s rate of pay.

The Equal Employment Opportunity Commission (EEOC) recently announced a proposal to annually collect summary pay data by gender, race, and ethnicity from businesses with 100 or more employees in order to evaluate and advance equal pay.

This additional scrutiny from the EEOC on equal pay, plus the Department of Labors impending reforms to overtime pay exemptions, mean its more important than ever for companies to assess their compensation practices and make corrections where needed.

Nextep’s HR department can be a valuable resource in those assessments, performing salary assessments with market data, creating job descriptions, and auditing positions to see whether they would be exempt or nonexempt from overtime pay.

For human resource guidance at your company on pay practices, please contact Nextep’s HR team.

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