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Do It Right: Legal HR and Payroll Practices


Although employers set salaries, they don't have completely free rein here. They do have to follow federal rules, and there can be serious consequences for violating them. Here are some steps employers should take to make sure that women and other protected classes receive equal pay for equal work.

Know the law

Several major federal laws address pay inequalities. The Equal Pay Act, for instance, requires employers to pay equal wages to women and men performing substantially equal work, while Title VII of the Civil Rights Act of 1964 includes prohibitions against the pay discrimination that happens when women are steered into lower-paying jobs or denied promotions.

Employers should study antidiscrimination laws and review pay policies to make sure they are compensating their employees fairly. Here are some employment practices companies should consider implementing:

  • Pick an employee who will be responsible for monitoring pay practices and making sure the company complies with antidiscrimination laws.
  • Annually review compensation systems to spot and change potential pay disparities.
  • Take a look at all forms of compensation, not just salary. These include bonuses, benefits, training, overtime and separation pay.
  • Correct problems as soon as they're spotted; don't let them fester.

Another thing to consider is how you match employees to particular jobs. Ask yourself how women and minorities are placed in certain jobs and challenge any assumptions you may be making about what skills and abilities they may or may not have.

Managers should ask themselves these questions:

  • Do you seek diversity in your workplace?
  • Are your training opportunities gender neutral?
  • Do salary and bonus negotiations adversely impact women or minority workers?
  • Do all workers have the same opportunities to advance?

Since performance evaluations can affect pay, review your evaluation process to make sure it doesn't put women and other protected classes at a disadvantage.


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Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
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