A Multistate Fair Pay Audit Is Today’s Smart Choice

In the 21st century, a multistate far pay audit has gone from being an option for business owners to a necessity. Many states, counties, and cities are in the process of either implementing or expanding fair pay laws. Such laws now include bans on salary history inquiries in the hiring process. The reason for this ban is that such questions fail to account for the traditional gender pay gap. If you are a multistate employer and the idea of staying in compliance with a complicated labyrinth of state and local laws seems overwhelming, Total HR Management can help with a multistate fair pay audit. After all, it’s always better to be safe than sorry.

The Importance of a Fair Pay Audit

multistate fair pay audit

A Multistate Fair Pay Audit Protects Your Company

Beyond helping to equalize pay among male and female employees, a multistate fair pay audit also can help to keep your company in compliance with other state, county and city requirements. The key is to be proactive by conducting a regular multistate fair pay audit in advance. Total HR has found that making such changes in advance is much easier than paying unneeded fines and undergoing potential litigation down the line.

To begin with, a company’s management needs to be willing to rectify any existing pay gaps. Although such a step can involve salary increases for female employees, the financial hit tends to be much less than expected. In addition, such proactive raises can empower female employees, leading to a boost in overall morale and greater productivity.

Avoid Damage from Unique Laws

Your company needs to avoid financial damage from fair pay laws that are unique to certain locations. As certified professionals in human resources, the HR managers at Total HR keep track of fair pay updates and payroll processing shifts in cities, counties, and states across the country. Wherever your company works, a multistate fair pay audit be done by Total HR. We will cover any needed fair pay compliance issues in the present. Moreover, once you become a client, we also will keep your company up-to-date with any future multistate fair pay compliance needs.

We never want a client company to be damaged by unique laws that apply to their specific locale or even industry. Beyond knowing the details, our best practices policy also includes an initial federal analysis in a multistate fair pay audit. In such an analysis, we make sure your company’s pay practices are in line with the Equal Pay Act of 1963 and Title VII of the Civil Rights Act of 1964. These laws are enforced by the U.S. Equal Employment Opportunity Commission (EEOC). Federal compliance comes first, then anything specific to a company’s multi-state locations and jurisdictions follows.

Federal Equal Pay Act Exceptions

The federal Equal Pay Act prohibits employers from paying workers of one sex less than the other for performing substantially the same job. Such equal pay exceptions can only be reconciled based on several traditional criteria. These criteria include the following:

  1. A company seniority system
  2. A clearly defined merit system
  3. Pay measured by the quantity or quality of production
  4. A differential based on a factor other than sex like technical expertise

A major problem is that equal pay exceptions under these criteria have been used in the past to enforce the traditional gender pay gap. Both the merit system and the seniority system can be difficult to quantify in certain business situations. California and several other states have done their best to close these loopholes. Total HR recommends closing them as well.

Specific Needs of A Multistate Fair Pay Audit

In particular, as an employer located in California, Total HR Management is well-aware of the specific state requirements that go well beyond federal regulations. Since the legal standard is broader, we make sure a company with California employees remains in compliance. For example, given the broader definition, California’s Fair Pay Act of 2016 requires fair pay for men and women who perform “substantially similar work, when viewed as a composite of skill, effort, and responsibility.”

Whenever Total HR works with a California-based company, our goal is to ensure compliance across the board. By handling the bureaucracy of payroll and other HR services, we lessen the pressure on your company, allowing business owners to get back to the basics. We want you to focus on the reason why you started or joined a company in the first place: being productive and increasing profits.

A Multistate Fair Pay Audit with Total HR

To go through a fair pay audit with Total HR, you first will need to contact us for a general HR audit. You also will need to have up-to-date and accurate employee and payroll data readily available. The different jobs in your business should be grouped together to do payroll comparisons. Such groupings usually are done by department. Furthermore, a fair pay audit can reveal disparities in company policies in regards to setting starting pay, calculating merit increases, and deciding upon promotions. In other words, more will be revealed.

If you want to know more about how a fair pay audit can help your company, contact Total HR Management today. Take the smart first step by calling (800) 975-5128 to set-up an HR audit.


No Legal Advice Intended: This blog includes information about legal issues and legal questions. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. You must not rely on the information on this website as an alternative to legal advice from your attorney or other professional legal services provider.



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