How the 2018 Equal Pay Act Stands to Impact Talent Sourcing & Hiring
Last quarter, OpenView hosted a community call with talent leaders across our portfolio to discuss the 2018 Equal Pay Act, which is rolling out in stages across various cities and states in the US throughout the year. Stephanie Walzak, a compensation specialist, led the discussion on how the Equal Pay Act stands to impact talent sourcing and hiring in months and years to come. Below are our key takeaways from the discussion.
Equal Pay Act Overview
The Equal Pay Act, enacted by various states and cities throughout the US, intends to address the gender pay gap by ensuring that prior low pay does not continue compound as people seek new employment opportunities.
For instance, under various equal pay laws, employers are prohibited from asking a job candidate their salary history. If salary history is publicly available, employers are prohibited from using this information to determine a compensation package. However, employers can openly discuss with a candidate their salary expectations.
As of January 1, 2018, California (joining San Francisco), New York City, Delaware, Massachusetts, Oregon, Philadelphia (pending legal challenge) and Puerto Rico adopted the Equal Pay Act, which applies to businesses that employ within the aforementioned locations even if company headquarters are located elsewhere.
Preparing Your Team
In order to prepare for the Equal Pay Act to take effect in your city or state, we encourage companies to remove all salary questions from hiring forms including job applications and background check forms.
Additionally, companies should no longer document salary history in their Applicant Tracking Systems (ATS) even if a candidate has volunteered this information. Instead of relying on historic pay, companies should use market data to determine competitive compensation packages.
Additionally, companies will need to train recruiters, hiring managers and all employees who are part of the interview process on the specifics of new equal pay laws.
Lastly, you need to implement these new policies across your business – whether or not your state or city has or plans to adopt the Equal Pay Act. We fully expect that more cities and states will pass similar laws and as such, it is ia best practice to apply these new standards across all hires across the United States.
You can view additional resources on the Equal Pay Act here:
CO HB17-1269 (Pay Transparency)
NV AB 276 (Pay Transparency)
City of Philadelphia Bill no. 160840 (pending legal challenge)