Democratic lawmakers reintroduced the Paycheck Fairness Act which called for Congress to pass the bill and combat the gender wage gap.

This would further the Equal Pay Act of 1963, which made it illegal to pay women lower wages than men for equal work on jobs requiring the same skill, effort, and responsibility. Currently, forty-two states have their own equal pay laws and eight have an exemption for small businesses. Most state’s equal pay acts allow for exceptions based on factors other than gender, such as seniority or merit. Opponents fear the legislation will make it difficult for employers to defend themselves against wage discrimination allegations based on legitimate compensation factors.

The new legislation would:

• Prohibit employers from asking about salary history during the interview process, putting the onus of establishing a competitive wage based on market knowledge on the employer.

• Direct the Equal Employment Opportunity Commission (EEOC) to create a system to collect wage data from private companies.

• Protect employees against retaliation for inquiring about their employers’ wage practices or disclosing their own wages. This practice is already in effect under Section 7 of the National Labor Relations Act.

• Require employers to prove that wage differentials are based on factors other than sex, thus shifting the burden of proof in these claims to the employer.

“The recruiting market is so hot right now that being wrong about your salary range will no doubt have a negative impact on the bottom line.”

In response to the industry’s desire to demonstrate their pay equality practice, BalancedComp, a leading compensation consulting firm for banks and credit unions, is enhancing our web-based application used to establish tailored wages based on asset size, and specific market by adding a gender pay ratio compa ratio report.

 

“To be able to proactively evaluate internally how salaries compare to the market rate based on gender, salary grade, and job classification is a definitely a significant competitive advantage,” says Christie Summervill, CEO. “The recruiting market is so hot right now that being wrong about your salary range will no doubt have a negative impact on the bottom line.”

Further reading: How Your Financial Institution Can Address Pay Equity Right Now

Back to Blog