Dive Brief:
- California's “Fair Pay Act”, which took effect at the start of the year, makes it easier for employees to sue employers should they feel their compensation is unfair due to gender bias.
- At the same time, the laws now account for equal pay for “substantially similar” work and remove the “same establishment” provision that had prevented employees in one location from comparing their compensation with an employee elsewhere. The new California law also proactively protects a worker’s right to share their compensation with another worker without fear of reprisal.
- With the likelihood of ever expanding fair pay laws (23 other states are considering a similar law), CEOs, CHROs and other executive leaders would be smart to change any current practices that would run afoul of these new laws, according to Talent Management.
Dive Insight:
In California, women working full-time make 84 cents on the dollar compared to white men, while African-American women make 63 cents on the dollar and Latinas just 43 cents. To improve, employers will need to accurately stage, analyze, report and project out relevant data over time as it pertains to fair pay. Talent analytics has a role to play in the discussion, according to Talent Management.
For example, a CEO might ask the CHRO officer for reports on total compensation by gender and ethnic groups for the whole organization. They may also want total compensation broken down by its subcomponents: base, bonus, commission and overtime as well as by tenure, time in role, location, job level, and job family.
The critical point: Generating insights into fair pay involves more work than most CHROs know, Talent Management says. One key component involves hiring a senior-level professional whose objective should be to consider such insights on an ongoing basis. Fair pay could very well be the process that inspires all leaders to adequately fund and get involved in talent planning, strategy and analytics.
