Pay Equity has been a trending business topic as we move to close pay gaps and promote equality. As a feminist who works in Human Resources, I am a huge fan of this movement. Massachusetts has already passed amendments to make changes, and the amended law will go into affect this July 2018! My hope is that other states quickly follow suit.
These changes can be broken down into three key areas: Salary History Bans, Pay Equity Standards, and Compensation Transparency.
Salary History Bans: The new Pay Equity Laws prohibit employers from asking about an applicant’s salary history before making a job offer. Some employers will calculate their offers based on what a candidate previously got paid, rather than what the position is worth. This can become problematic and is often unfair to employees. With this ban, the position will be worth a static range, and employers will have to move forward with an offer without knowing their previous salary. Employees are free to disclose any information at their own discretion, but employers may not ask until after an initial compensation offer has been made.
Pay Equity Standards: The gender pay gap is something that I have always heard of and been aware of, but this is the first time that I’ve really seen anything being done about it. There are new reporting laws surrounding pay equity that ensure that businesses are doing their social responsibility to address this issue. Companies must engage tools and resources to understand what pay gaps exist in their organization, and they are obligated to take action. Some pay gaps are valid and explainable, and things like tenure, experience, or education will be taken into consideration. Outside of those explainable circumstances, business will legally have to prove that there is an effort being done to close these gaps.
Compensation Transparency: This protects employees to have the freedom to disclose and discuss compensation information with coworkers. It’s crazy to me that employers can discipline employees for discussing their pay with each other – how is this legal?? In my previous position, my company was bringing in new hires at a higher rate than their tenured associates in HR. When I pressed my boss about this, her response was, “technically, you aren’t even supposed to know about that.” Well, that will now be illegal. Employees will now be protected, and if any unfairness is exposed, the company will have to address it. By creating transparency, this ensures consistency across the organization.
In my opinion, if a company sees these changes and has anxiety, that should question the integrity of that organization. These laws are being put into affect to protect employees, and organizations who are already conscious of their employee experience should feel at ease.
Employees should feel protected.
Thanks for reading!
Info verified from Mass.gov