Addressing Pay Disparity: A Crucial Step for Employers

Pay disparity continues to be a significant issue for the Equal Employment Opportunity Commission (EEOC). Recently, the EEOC filed a lawsuit against a hotel and hospitality company, highlighting the importance of proactive measures in addressing wage inequality. The former operators of a Marriott Courtyard hotel were accused of paying a female front desk supervisor and female guest services representatives (GSRs) less than a male GSR performing equal work. When employees raised concerns about this wage disparity, the company responded unlawfully by reducing the wages of the male GSR.

The case was resolved through a three-year consent decree, providing $400,000 in backpay and other damages to 25 claimants. The decree also includes an injunction against Title VII and Equal Pay Act discrimination and mandates the hospitality company to retain a labor economist to conduct periodic pay equity studies, with the findings reported to the EEOC.

This case underscores a critical lesson for employers and managers: "An ounce of prevention is worth a pound of cure." If the hospitality company had engaged in a wage equality study—using either internal or external resources—it could have avoided litigation fees, settlement costs, and significant negative publicity.

Why Proactive Pay Equity Measures Matter:  Proactively addressing pay equity is not just a legal obligation; it's also a strategic business move. Conducting regular pay equity studies can help identify and rectify wage disparities before they escalate into legal challenges. By ensuring fair compensation practices, employers can foster a more inclusive and motivated workforce, enhancing overall productivity and employee satisfaction.

Steps Employers Can Take:

• Conduct Regular Pay Equity Audits & Implement Transparent Pay Practices: Engage a labor economist or utilize internal resources to periodically review pay practices. Tools and resources for conducting these audits are available from organizations such as the National Women's Law Center and the Institute for Women's Policy Research. Clearly communicate your compensation policies and criteria for pay increases. Transparency can help prevent misunderstandings and build trust within your organization. CTR Payroll | HR offers a compensation management solution as well as reporting to assist in audits.
• Train Management on Pay Equity: Ensure that managers understand the importance of pay equity and are equipped to make fair compensation decisions. The Society for Human Resource Management (SHRM) offers valuable resources and training programs on this topic.
• Create a Safe Environment for Reporting: Encourage employees to voice concerns about pay disparities without fear of retaliation. Establishing a robust reporting mechanism can help address issues promptly and fairly.
• Stay Informed About Legal Requirements: Keep up-to-date with federal, state, and local laws regarding pay equity. CTR Payroll | HR offers monthly compliance webinars- Register for our upcoming webinars here and check out our past webinars here. The EEOC and Department of Labor websites provide comprehensive information on compliance requirements and best practices.
• Partner with CTR Payroll | HR: Navigating the complexities of payroll and HR compliance can be challenging. With our comprehensive payroll and time management, CTR Payroll | HR can help your organization stay compliant with evolving employee leave laws and pay equity standards. Contact us now. 

Learn More: For more information on how to conduct pay equity studies and ensure compliance with equal pay laws, visit the EEOC's website at eeoc.gov. 

Remember, addressing pay disparity proactively can save your organization from costly litigation and enhance your reputation as a fair and equitable employer. Take action today to ensure pay equity within your workplace.