In 2023, pay equity is a hot topic in employment. Three recent settlements by major U.S. businesses illustrate the trend:
Google will pay $118 million—including $29.5 million in attorney fees–to end a class action in which 15,000 women claimed they were underpaid, compared to their male colleagues. According to the employees, the problem stemmed from Google’s practice of asking candidates about their salary history.
Hewlett-Packard Enterprise has agreed to pay $8.5 million to settle a class action that accused the company of paying women less than men. As in the Google case, the H-P employees alleged that supposedly uniform policies ended up paying women less because the company considered new hires’ prior compensation to set their pay. Further, they claimed, raises perpetuated and widened the gender pay gap because they were based on a percentage of an employee’s existing salary.
After a routine Labor Department compliance audit, The Bank of New York Mellon Corp. is paying nearly $2 million to resolve alleged systematic pay discrimination against female, Black and Hispanic employees. The audit found that the bank paid the women less than men in similar positions, and paid the Black and Hispanic workers less than their Asian counterparts.
What would a respectful employer do?
Rather than wait to be audited or sued, you can make sure that compensation is fair and equitable by:
- Analyzing compensation annually for disparities based on gender, race, ethnicity, or any other protected characteristic;
- Making salary adjustments to remedy significant pay disparities; and
- Providing enhanced training to managers to ensure future compliance.
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