The California Fair Pay Act: Ripple Effects on Your Business Mykkah Herner, MA, CCP Modern Compensation Evangelist Angela Ulman, CCP Compensation Professional
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The California Fair Pay Act: Ripple Effects on Your Business
Mykkah Herner, MA, CCPModern Compensation Evangelist
Angela Ulman, CCPCompensation Professional
www.payscale.com
15,000 Positions 3500 Customers 11 Countries
250 Compensable Factors54Million Salary Profiles
www.payscale.com
Agenda
The California Fair Pay Act
o Why does it matter to me?
o Compliance
o Other Pay Equity Laws
Going beyond mere compliance
What should I do first?
Legal Disclaimer: this is intended to be informational, not to serve as legal advice. If you think you have a potential pay discrimination issue, seek out a lawyer.
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Why should the California Fair Pay Act matter to you?
As California Goes…
…so goes the nation.
My company is in Mississippi!
But… I do have that one employee in California.
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What do you need to know in order to comply with the California Fair Pay Act?
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3 main changes
Definition Secrecy Burden of Proof
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Deeper definition of Fair Pay
Same work requiring same skill, effort, responsibilities, and working conditions
Across all locations
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Pay Secrecy is unacceptable
Communicate their own pay
Talk about other people’s pay *
Inquire about other people’s pay *
No imperative in the law to disclose anything
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Increased Burden of Proof
of pay difference between men and women must be demonstrated to stem from one or combination of
• Merit Process
• Seniority Process
• Production quality or quantity Process
• Bona fide factor other than sex
Implications of 100 Proof
• Clear & documented process for determining hiring rates
• Clear & documented process for allocating increases
• Rationale for differences must be captured
This isn’t the time to give up…
Image from http://www.havingtime.com/10-reasons-you-should-never-give-up/
… on Pay for Performance!
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Increased Burden - bonus proof
Keep your records for 3 years now!
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What other pay equity laws should you be aware of?
Turns out 48/50 States have some version of a pay equity law on the books
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New York’s Equity Law 1/19/2016
• Definition: similar work under similar conditions; rationale for differential pay updated to “bona fide factor other than sex, such as education training or experience”
• Secrecy: NY added the right to inquire about, disclose, and discuss wages
• Proof: burden of proof is on the employer, and the penalty for getting it wrong is big
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Canada has it going on
Employer has burden of proof• Manitoba• New Brunswick• Nova Scotia• Prince Edward Island• Ontario• QuebecPolicy framework for negotiating pay• Saskatchewan• Newfoundland• British Columbia
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Sneak peak into proposed reporting
• *Proposed* by EEOC• 100+ EE employers• Adds 12 pay bands to existing EEO-1 report• Report #EEs on one grid, #Hours on the other• First report due 9/30/2017
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Going beyond mere compliance
It’s about way more
than compliance
Let’s dig deeper…
http://www.payscale.com/data-packages/gender-pay-gap
Why is the difference so big in the uncontrolled gap?
http://www.payscale.com/data-packages/gender-pay-gap
5 factors that affect the gender wage gap:
http://www.payscale.com/data-packages/gender-pay-gap
• Job Type• Job Level• Compensable Factors• Marriage & Family• Unconscious Bias
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Go beyond compliance with fair pay
• Similar work by similar people*• Leadership roles• STEM jobs• Workplace currency & Systematic Bias• Go beyond 2 genders• Aiming for fairness now prepares you for
future legislation
Top companies report gender pay data
Source: http://www.informationisbeautiful.net/visualizations/diversity-in-tech/ Dec 2014
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Paying fairly is brag worthy
• External branding• Internal branding or EVP
Millennials aren’t just employees
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It’s a VUCA world
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Paying Fairly leads to business results
• Make a business case• It’s beyond nice, it’s necessary!• Oh the millennials• Companies that don’t change will fail
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Where do you start?
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• Have a compensation plan• Conduct an audit now • Review and update all documentation• Train executives, managers, and employees• Go *far* beyond compliance
PayScale Delivers Where Other Compensation Providers Fall Short
PayScale leads the world in compensation knowledge with the freshest and most detailed data from over 54 million salary profiles. More than 3500 organizations use PayScale’s software and intelligence to get the greatest return on their talent. Smart businesses use PayScale Insight to recruit, retain and motivate their people.
Visit our blog: www.payscale.com/compensation-todayJoin our Group on LinkedIn: Compensation Today: HR Best Practices
Mykkah Herner, MA, CCPModern Compensation Evangelist
Angela Ulman, CCPCompensation Professional
www.payscale.com
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