It is no secret to our readers that the EEOC and the OFCCP have prioritized compensation discrimination issues as an enforcement priority. The general public, and hence employees, are also keenly aware of pay discrimination issues. From Sheryl Sandberg’s and Nell Scovell’s “Lean In” book and “Lean In Circles” to the John Oliver skit on the gender pay gap to the controversial YouTube video showing girls dropping “F-bombs” and challenging pay inequity, it is clear that pay equity is not just the focus of legal actions, but also the focus of widespread public discussion.
So what are companies doing to ensure that they are paying employees equitably? Tara Siegel Bernard wrote a great article in Saturday’s New York Times about this topic. In it she describes the vigilant efforts of various companies to ensure fair pay. She points out the positive “ripple effects” for companies that are proactive. Though the article discusses how statistical evaluations assist companies in identifying potential issues, it only briefly mentions the risks of conducting such evaluations improperly. It is critical for employers to carefully develop appropriate statistical models and conduct preventative pay equity audits under the supervision of a lawyer to protect privilege. For more information about conducting privileged pay equity audits, see our client alert on this topic. It’s also important to remember that statistical disparities, even ones discovered through a properly modeled study of compensation, do not mean there has been discrimination. Audits are merely a tool to flag potential issues for closer assessment. It often turns out that upon closer assessment individuals within an analysis group are not similarly situated and there are valid reasons for differences in pay.