3 Steps to Get Ahead of the Curve: Pay Transparency Laws
Benjamin Franklin once said, “An ounce of prevention is better than a pound of cure.” He understood that it’s much easier to take small preventive steps now than to deal with a big problem later. For organizations not currently equipped to comply with pay transparency laws, now is the time to apply “an ounce of prevention” before “a pound of cure” is necessary.
Pay transparency laws have matured and spread in recent years—and the momentum is picking up. If the trend continues, one or more laws apply to your organization sooner than later. Because you can see the changes coming, you can act now to be prepared.
This article will cover the basic preparation steps to successfully navigate the future of pay transparency.
Equal Pay for Equal Work
Before jumping into the recommendations, understanding the broader context is helpful. What’s the purpose of these laws? TL;DR: to achieve pay equity.
Even though the Equal Pay Act was passed back in 1963, gender-based pay gaps persist. Legislation regarding salary history bans, pay range disclosure, and pay data reporting are all intended to close the pay gap and achieve “equal pay for equal work” for all categories of workers.
Get Ahead of the Curve
HR and Compensation professionals seem to be busier than ever. Preparing for pay transparency laws need not be overwhelming. Focus first on building the foundation. Taking these initial steps—on your own or with the help of a qualified consultant—can help you make steady progress and feel confident to comply when the time comes:
1. Be aware of laws that apply to you.
Before you set out on your preparation journey, you need to know where you’re headed. Laws and requirements vary from city to state to country. Find a reputable source to learn what laws apply to your organization by location and company size.
Pay attention to common and unique requirements, like including pay ranges in job postings or providing pay data to current employees.
Take note of discrepancies between the laws and your current practices and then outline a plan of action to resolve them.
2. Develop or revamp your pay ranges.
While the specifics may vary, pay transparency laws require the sharing of pay ranges with candidates and/or employees. It goes without saying that you first have to establish pay ranges in order to share them.
Whether defining them for the first time or revamping them for current conditions, you need to determine an appropriate minimum and maximum pay rate for each job in your organization.
The method you use to define these values is up to you. Depending on the maturity of your compensation practices and the complexity of your organization’s job catalog, this step may require a significant investment of time and resources to get right.
3. Prepare for conversations about pay.
As a social norm, pay information has traditionally been private. The new reality of pay transparency will reveal previously unknown pay information to candidates and employees.
This new information is likely to raise genuine curiosity (at best) or outright angst (at worst). Handling these sensitive conversations requires preparation and empathy.
Develop talking points and trainings to encourage an accurate and consistent message about pay practices at your organization.
Taking these steps will prepare you to comply with pay transparency laws and lay the foundation for equitable pay practices at your organization. If you find yourself without the wherewithal to complete these steps, the certified experts at GBS are ready to partner with you. Contact us today!
Written by Clay Johnson, CCP, SHRM-SCP
DIRECTOR, TOTAL REWARDS CONSULTING
