Fair-Pay Audits Coming – Is Your Firm Ready?

Federal agencies just vowed to coordinate fair-pay audits and investigations. Is your firm prepared?

One reason why the Paycheck Fairness Act didn’t pass was that critics claimed that we already have sufficient fair pay regulations on the books. Just enforce those, they said.

And that’s exactly what’s happening.

With public employees (and their unions) in the bullseye of state and Federal budget debates, the relevant agencies are ramping up collaboration to ensure equitable pay for everyone – starting with their fellow federal workers.

As reported by 1500 AM Federal News Radio (who knew they had their own frequency?),  the top execs of the Office of Federal Contract Compliance Programs (OFCCP) and the Equal Employment Opportunity Commission (EEOC) are collaborating to ensure that employers comply with all existing laws.

Most people have heard of the EEOC, but  not the OFCCP. That will change as director Patricia Shiu continues to ramp up compliance with the mission of the agency, which is to ensure that every workplace that benefits from Federal contracts can prove that it pays men and women equitably. If you’re a Federal contractor or subcontractor, this applies to you.

The stakes can be significant. In a recent speech, Shiu talked about a case the OFCCP recently settled with a supplier of meat to school lunch programs. Over 1,000 women were not hired. Now, the supplier has to pay each of them the equivalent of wages and benefits they would have received if they’d gotten the jobs. And, they are first in line for upcoming jobs with that company.

The EEOC and OFCCP have different but overlapping missions. By coordinating their efforts,  virtually every employer – except for the tiniest – will be subject to random audits. Just making sure everyone follows the law, you know…the laws that have been on the books for decades.

Just last week, I learned that a client was hit by an OFCCP audit.  The audit bumped everything else from her agenda and has occupied several staffers full-time for over three months. And this is an employer that has been working diligently and openly to advance women.

How can you get ahead of this?

  • First, put in place internal pay equity audits. Don’t assume that because every manager claims to pay equitably, that he or she actually does. Prove it.
  • Second, put in place fair-pay training. Build in reminders and checks so that managers have to actually think about equitable pay as they make compensation decisions.
  • Finally, be open about your process. Everybody wants to be paid more, and it is common for employees to assume that ‘fair pay’ means ‘I’m being paid unfairly.’  That’s not the case…so communicate about pay practices, regulations and definitions to equip employees with the context they need to fully understand what these regulations will and won’t do.  A little bit of strategic communicating might head off a rathole of a complaint.

Image courtesy of Morguefile contributor pennywise.

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