Employers’ Guide to Complying with the Equal Pay Act

What you’ll discover:

What exactly is the Equal Pay Act?
What is expected of an employer?
How does an employer comply with the regulations?

The new company owner rapidly discovers that there are many federal, state, and local requirements to follow while still operating a profitable firm. Workers expect to be treated and payed appropriately. When workers believe they are not being treated properly or are not being rewarded appropriately, a company confronts challenges. There are several laws in place to safeguard the rights of employees. The federal Fair Pay Act is one of these statutes.

What exactly is the Equal Pay Act?

The Fair Pay Act forbids sex-based pay discrimination in occupations that are conducted under comparable circumstances and involve equal ability, effort, and responsibility. Salary, overtime compensation, bonuses, stock options, profit sharing and bonus schemes, life insurance, vacation and holiday pay, petrol allowances, hotel accommodations, travel costs reimbursement, and perks are all covered by the legislation.

What is expected of an employer?

Equal compensation for equal labor is mandated by law for men and women who work in the same workplace. Employees’ wages cannot be discriminated against based on their gender. All workers must be treated fairly and equitably. An employer treats men and women equally by assigning them to tasks in the same facility (particularly if the business has many locations) that:

Equal talent, same effort, equal duty, and equal accountability
Job responsibilities must be done under identical working circumstances.

In a word, occupations for men and women do not have to be identical, but they must be substantially equal. This does not imply that all workers must be paid the same. Pay disparities are acceptable, but they must be based on factors other than sex or gender.

How does an employer comply with the regulations?

Achieving these standards may be difficult for small businesses since many workers, regardless of gender, perform many jobs or functions. In such cases, the employer wishes to establish the reasons why workers are working and getting paid. This may be accomplished by:

Make certain that a seniority system is in place
Following a strict seniority system (no exceptions!)
Putting in place and using a meritocracy
By assessing production quantity and quality and using the findings into employee pay or salary incentive programs
Any additional elements or justifications that are not focused on gender