Compensation Compliance

Closing the Gap on Unfair Pay

Employers need to act now to make sure their pay practices don’t discriminate; ORC Worldwide can help

Lawmakers in the United States are tightening rules and beefi ng up enforcement to ensure that employers’ pay practices don’t discriminate on the basis of gender, ethnicity or other non-business related factors. ORC’s Workforce Management and Compensation consulting teams can help employers ensure their pay practices are compliant with this changing regulatory landscape and minimize the risk of costly fines and lawsuits. 

More Cases, More Penalties

Recent legislation is expanding opportunities for employees to fi le claims of unfair pay. The Lilly Ledbetter Fair Pay Act of 2009 has extended the statute of limitations on fi ling such claims, and the courts have held that this extension applies to all types of pay decisions.  The federal government also is stepping up enforcement. Since the signing of the Lilly Ledbetter Fair Pay Act, the Equal Employment Opportunity Commission (EEOC) and the Department of Labor’s (DOL) Offi ce of Federal Contract Compliance Programs have hired hundreds of new investigators to follow up on claims. In addition, the DOL’s Wage and Hour Division has also hired hundreds of new investigators. 

New Enforcement Approaches

The EEOC is widening its search for “pattern and practice” discrimination. It is no longer relying on specific charges made by claimants, and is now reviewing every claim of unfair pay for evidence of systemic discrimination. As a result, the EEOC is increasingly requesting data from employers on their nationwide practices, a request that courts are routinely allowing.  Meanwhile, the DOL and the Internal Revenue Service are focusing more attention on whether employees are being properly classifi ed in compliance with the Fair Labor Standards Act (FLSA). Substantial changes are being made to the FLSA that may impact how
some of your employees are classifi ed. Congress is considering making employee misclassification a criminal offense subject to a substantial fine.