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Employers face new wage-equity laws

A growing number of states and major cities have recently adopted wage equity and salary history laws in an effort to close the wage gap that exists between male and female employees.

According to the Bureau of Labor Statistics, in 2016, the average female employee earned 80 cents for every $1 a man received during the same period. Statistics suggest the gap may be even greater for ethnic or racial minority employees.

In part, that’s why a growing number of cities and states have passed or proposed legislation to ban requests for applicants’ salary history, on the theory that if an employee experiences pay inequality in a prior job, disclosing their past salary when applying for a new job has the potential to perpetuate the effect of the past discrimination.

California, Delaware, Oregon, Massachusetts, New York City, Philadelphia and San Francisco are among the jurisdictions that have or will soon restrict the ability of employers to inquire about past or current compensation as part of the job application process.

So far, Colorado isn’t in that group, although efforts to pass such legislation have cropped up in the Statehouse. Still, legal and HR departments should weigh the value of asking applicants for their salary history against the risk of pay discrimination lawsuits.

Colorado, Kansas and Missouri all do have equal pay laws on the books prohibiting employers from paying women less than men.

Where federal and local laws differ, the law that provides the greater protection or benefit to the employee applies.

Affected employers should:

  • Eliminate prohibited salary history inquiries.
  • Update job applications and other employment forms to comply with pay equity laws.
  • Train recruiters and hiring managers regarding applicable pay equity laws.

Employers also should be aware of the following federal laws that regulate employment discrimination and other aspects of the hiring and employment processes.

Equal Pay Act

This law requires that men and women receive equal pay for equal work.

Covered Employers and Employees: Virtually all employers and employees.

Requirements: Employers are required to pay equal pay for equal work, regardless of gender. Men and woman in substantially equal jobs, those requiring equal skill, effort, and responsibility and performed under similar conditions at the same workplace, must be paid equally.

Title VII, ADEA, ADA      

Title VII, the Age Discrimination in Employment Act (ADEA) and the Americans with Disabilities Act (ADA) prohibit compensation discrimination based on race, color, religion, sex, national origin, age or disability. There is no requirement that the jobs be substantially equal.

Covered Employers and Employees: Title VII and ADA, all employers with 15 or more employees. ADEA, all employers with 20 or more employees.

Executive Order 11246  

The order, signed by President Lyndon B. Johnson in 1965, prohibits discrimination in employment decisions based on race, color, religion, sex, sexual orientation, gender identity or national origin.

Covered Employers and Employees: Federal contractors and federally assisted construction contractors and subcontractors, who do over $10,000 in government business in one year.

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