Employers should conduct equal pay audits

Amid the focus on culling diversity, equity, and inclusion (DEI) programs and initiatives over the past year, employers must distinguish DEI efforts from core compliance activities, such as equal pay audits. Compensation reviews and audits should remain a routine best practice for organizations to ensure compliance with federal, state, and international laws. Additionally, such audits mitigate exposure to formal legal actions alleging violations of compensation discrimination laws and help organizations maintain fair, competitive compensation structures.

Compliance with federal, state, and international laws

At the federal level, Title VII of the Civil Rights Act of 1964 and the Equal Pay Act (EPA) continue prohibiting compensation discrimination. Further, a growing number of states, as well as the European Union, are implementing pay transparency and pay reporting requirements on employers. For national and multinational organizations, there exists a patchwork of regulations that go beyond federal standards by broadening what constitutes comparable work, what is included in pay data reports to regulatory agencies, and what must be disclosed to applicants and employees about pay ranges.

By using a standardized audit process, employers can ensure consistent equal pay reviews across their operations, while tailoring the analysis to comply with each specific jurisdiction’s unique legal obligations.

Mitigate exposure to litigation and/or enforcement actions