Given the continued focus on pay equity and the increase in related state and federal legislation, compliance and compensation practitioners need to collaborate when setting starting pay for new hires. Several states have enacted or proposed pay equity laws that strictly forbid a person’s prior salary to be a determining factor for setting base pay. Unfortunately, many employers are unaware of the nuances of these new laws and/or how to ensure that their own compensation practices are in compliance. Even employers who routinely monitor current compensation for internal pay equity may be putting themselves at risk for pay inequity when making starting pay decisions.
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