Ellen Feeney, Vice President, Counsel, Global Compliance, ADP LLC, examined pay equity and its importance for today's employers in her presentation to Argyle's CHRO membership at the 2017 Human Capital Leadership Forum in New York on May 4. In her presentation, "Creating Pay Equity in the Workplace: What's the Impact to Employers?" Feeney discussed the benefits of pay equity and its strategic impact on employers.
According to Feeney, pay equity laws vary around the globe. Regardless, organizations must comply with these laws at all times.
Many pay equity laws don't have a financial penalty associated with them, Feeney said. However, the damage that an organization could suffer if it fails to comply with pay equity laws may extend beyond its bottom line.
Ultimately, an organization must learn about its responsibilities relative to pay equity laws. This will enable an organization to understand its pay equity compliance and reporting requirements, Feeney said, so it can take the necessary steps to follow these laws consistently.
"When we're looking at pay equity laws, we're always looking at who is going to be covered, and most large organizations are covered," Feeney stated. "Also, we're really focused on reporting, and what are those affirmative obligations that an organization has to report."
Pay equity laws constantly evolve, Feeney said. As such, organizations must allocate the necessary time and resources to learn about pay equity laws to ensure ongoing compliance.
"Employers need to be preparing … but there's a chance that [pay equity] requirements could change," Feeney indicated. "Depending on your organization's risk tolerance … [pay equity] is something that you should definitely be looking at."
How organizations assess pay equity data could prove to be important, particularly when it comes to compliance with pay equity laws.
"[Employers] need to look at more than just base pay differentials. They also need to look at total compensation."
Many organizations collect pay equity data but fail to analyze this information effectively. However, new laws may be enacted that require organizations to produce in-depth reports that highlight pay equity patterns and trends. These reports would enable organizations to comply with pay equity laws as well as optimize the pay equity data at their disposal.
"Even just the way that data is displayed on a report … doesn't always help an organization address pay equity," Feeney said. "[Employers] need to start thinking about their pay practices and take a deeper dive into their data."
Although many organizations assess base pay differentials across a workforce, few organizations analyze total employee compensation data. Conversely, analyzing employee compensation data may help an organization discover innovative ways to attract and retain top talent.
"[Employers] need to look at more than just base pay differentials. They also need to look at total compensation," Feeney pointed out.
Some states do not allow employers to ask job candidates for salary history information, Feeney said. The mandates vary from state to state, and in many instances, employers must consider whether salary history should play a role in determining an employee's compensation.
"[Salary history] is one of the issues that HR needs to look at and decide … when it is going to be a tipping point that leads to changes in recruitment practices," Feeney noted. "As an emerging issue, this is something that employers are going to have to look at closely."
Moreover, taking a proactive approach to evaluate workplace pay practices could make a world of difference for organizations around the world.
"Under [one state's law], employers are going to be looked upon favorably if they take a proactive approach to looking at payment practices in the workplace. This could be the start of a trend."
With a proactive approach, an organization will be better equipped than others to identify weak areas and make improvements. Then, this organization could deploy superior pay practices – something that could help the organization stand out to both job candidates and legislators.
"Under [one state's law], employers are going to be looked upon favorably if they take a proactive approach to looking at payment practices in the workplace. This could be the start of a trend," Feeney stated.
How an organization analyzes pay equity laws may dictate its immediate and long-term success.
If an organization learns about pay equity laws, it may be able to identify pay practice patterns and trends. As a result, this organization can maintain compliance with assorted pay equity laws and discover ways to offer compensation packages that meet or exceed job candidates' expectations.
Furthermore, an organization that keeps track of pay equity law developments and deadlines can avoid potential brand reputation and revenue damage associated with non-compliance. This organization will be able to show job candidates that it is doing everything possible to provide fair compensation packages, which may make the organization an attractive choice for top talent.
"You need to be monitoring developments and deadlines if you're global," Feeney said. "It's a country-by-country analysis. Or, in the United States, it's a state-by-state analysis."
Ellen specializes in healthcare reform, pay equity, and other emerging employer compliance issues. Ellen is part of the leadership team for Health Care Reform and provides compliance support related to several topics across ADP.
Ellen has extensive experience providing training and day-to-day advice on payroll, HR and ACA compliance. Ellen is a frequent speaker on workplace laws and how they affect employers of all sizes. She received her undergraduate and law degrees from the University of Notre Dame.