Recently-enacted pay-equity statutes and proposed pay-equity legislation have received a lot of attention of late.

You may be surprised to learn that, like the federal government, most states have had pay-equity laws on the books for years. Yet, the "pay gap" persists.

Theories abound as to why the pay gap exists and how to close it. Although conversations on these topics are occurring on a national stage, it's the individual states and big cities that have taken up the charge to try to eliminate the pay gap. And each state and locality is putting its own little spin on the best way to do it.

The unfortunate result for employers is that we now have a growing patchwork of pay-equity laws that differ and often contradict each other.

For example:

  • Many cities and states that have passed or proposed legislation have chosen 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.
  • Most states are redefining "equal work" in ways that make it very difficult for employers to know who should be compared to whom for purposes of analyzing whether pay disparities exist.
  • Other states are focused on pay transparency and prohibit employers from restricting employees' ability to share and discuss compensation.
  • Some states, like Massachusetts, have enacted or are considering legislation incorporating all of these concepts.
  • Meanwhile, California, Maryland and Oregon have gone even further and expanded pay-equity laws to cover not only gender, but also other protected categories, such as race, ethnicity and nationality as well.

So, what's an employer to do? There's no easy answer.

However, there are ways you can reduce your risk when faced with lawsuits or government investigations under pay-equity laws. The top four things you can do immediately to minimize your chances of facing a legal claim, or maximizing your chances of success if you find yourself on the wrong end of an allegation of pay equity discrimination, are:

  1. Stop asking applicants for salary history and instead ask for salary expectations.
  2. Update your employment applications and other hiring documents to eliminate questions seeking salary history.
  3. Train those employees involved in the hiring process about the new laws and prohibitions against seeking salary history.
  4. Conduct a privileged pay-equity audit and take steps to eliminate pay disparities.

Some states, like Massachusetts and Oregon, provide safe harbors or affirmative defenses for employers that do this. To ensure this audit is privileged and protected from disclosure, you should get legal counsel involved before you start down this path, preferably counsel trained on pay-equity nuances.

Even if you're not (yet) legally required to take any of these steps, chances are good that you soon may be. Consider adapting to this trend sooner rather than later so you're not caught flat-footed when pay equity regulations are put into place in your neck of the woods.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.