Running a business requires having legal rudiments in place for many aspects of your company. The Equal Pay Act (EPA) is another federal law you must comply with and doing so can help you avoid wage and promotion lawsuits like the one recently faced by Sterling Jewelry.
Steps to Take to Ensure Equal Pay and Fair Promotions
XpertHR , a site by Lexis Nexis, suggests you take the following steps:
Knowledge of the EPA and State/Local Wage Laws. Under the EPA, men and women who work comparable jobs should receive equal pay. What determines whether jobs are comparable? Skills, job responsibilities, and similar working conditions in the same geographical regions are all factors. Equal pay encompasses more than just salaries and includes overtime, bonuses, stock options, insurance, vacation and holiday pay and other benefits such as promotional opportunities. Consult with your lawyer so you can also be aware of any state or local wage laws.
Anti-Discrimination Policies. Your company should have a policy that explicitly prohibits wage discrimination. All employees should receive pay based on their experience and skill.
Fair Decision-Making. Ensure no discriminatory factors are part of decision-making in regards to raises, bonuses and promotions. Such decisions should be based on skills, merit and performance and should never be based on protected classes of sex, race, national origin, etc.
Management Training. As the employer, you must ensure your supervisors and managers receive training on your policies and ways to avoid wage discrimination. They must understand what are non-discriminatory reasons and base decisions on legitimate factors.
Salary and Bonus Guidelines Documentation. To legally protect your business, you must create documentation. Document the guidelines you have established for deciding bonuses, such as whether merit, productivity, sales and commissions are the criteria. These are fair and predictable criteria for decision-making. In addition, letting managers, supervisors and employees know about the criteria helps them to meet job expectations and understand how decisions are made.
Documentation of Decisions. Document your employment decisions and have adequate records in case you ever need to defend them in disputes or lawsuits.
Auditing Pay Practices. Regularly review your pay practices to ensure no discrimination exists and take corrective action if any is uncovered.
Diverse Work Environment. Incorporate best practices that aim to hire employees based on merit, skills and experience and not based on excluding protected classes.
Performance Evaluations. Provide annual or biannual performance evaluations to help employees understand employment expectations.
Discussion of Wages. It’s illegal to prohibit employees from discussing wages, salary or benefits with other employees. The National Labor Relations Act affords employees this right. Do not prohibit it.
Prevent Lawsuits and Employment Disputes
Today, laws affect businesses in many ways. If you’re a business owner and have questions or concerns about legal issues, Stephen Hans & Associates can provide you with answers and help you safeguard your workplace.