Pay Transparency Executive Order 13665
This new Executive Action came into effect January 11, 2016. https://www.dol.gov/ofccp/PayTransparency.html This means that businesses MUST review/change/update their handbooks and policies to adapt this new law. These changes are meant for nondiscrimination for employees who wish to discuss their pay and ask about the pay of others in the organization.
The reasoning for this New Law by the US DOL OFCCP: “In too many workplaces around the country, women and people of color don’t know what their counterparts are earning for the same work. A culture of secrecy prevents them from finding out if they are being discriminated against in time to act on it. Lilly Ledbetter learned, only after decades at her job, that she had been paid less than her male counterparts. Her company’s policy forbidding her from discussing pay with co-workers prevented her from getting the information she needed to bring a complaint in time.
Not only must handbooks and policies have to be adjusted but managers especially HR professionals need to be familiarized with this new ruling.
It is the mission of the Federal Government to add regulations with the intention of helping the American worker. At the same time it does cause more regulatory control on businesses.
In short this means that an applicant or employee cannot be disciplined in any way for discussing compensation. This would include his/her pay and asking for the pay of other workers in the company.
There is an exception; the HR professional and others that are familiar with the pay such as, benefit administrators, payroll administrators NOT share the pay of the employees.
This is a good reason to have a compensation analysis conducted yearly. Many of our clients request this. In this analysis incumbents in Job Groups are compared by Time with the Company and Time in the Position. Then we delve further by Job Title. If TWC and TIP does not explain differences found, we work with the HR team to look at starting pay and what determined that e.g. education, experience, additional skills. Then we look into yearly evaluations.
Remember the best friend you have is DOCUMENTATION. I cannot stress that enough. Documentation will save you from anguish and grief.