Reviewing Your Pay Practices

LISTEN to what your managers and employees are saying. The following types of statements can be red flags telling you to review your pay practices:

  • “It is not our fault if they are bad negotiators for their own salaries.”
  • “We should be able to pay our workers what we want to pay them.”
  • “We can’t talk about pay at work.”
  • “I assume everything is fair because no one is complaining.”
  • “I’m not sure who checks our compensation system for equality, but I know it’s not me.”
  • “I’m not exactly sure what was used to decide this salary.”


LOOK at Whether and How You Monitor Your Pay Practices

  • Designate individuals who will be responsible for monitoring pay practices and reviewing your compliance with federal, state and local anti-discrimination laws.
  • Evaluate your compensation system at least annually for potential pay disparities based on race/ethnicity and gender.
  • Evaluate all forms of compensation (starting salary, benefits, bonuses, shift differentials, overtime, training opportunities, separation pay, etc.).
  • In addition to an annual assessment, throughout the year conduct periodic “spot” checks for potential compensation problems.
  • Correct problems as soon as they are discovered.
  • Conduct regular equal employment opportunity training on compensation to increase awareness.
  • Evaluate how you assign your employees to specific jobs:
    • Focus on job recruitment, placement and how pay is assigned to job   classes.
    • How are women and minorities placed in your workforce? Do you make assumptions about what they can or cannot do?
    • Does your hiring process seek diversity in the qualified applicant pool?
    • Do you offer career training or opportunities for both genders?
  • If starting salaries and signing bonuses are negotiated, ensure that such a practice does not have an adverse impact on women or minority workers.
  • Evaluate whether all workers have equal opportunity for advancement.
  • Evaluate how pay raises and bonuses are determined to ensure that decisions are made in a non-discriminatory manner.
  • Performance evaluations can impact pay. Periodically review your performance evaluation process and the ratings given to each employee to determine whether the process or the ratings unfairly disadvantage women, or any other protected class.

Increase Transparency in Compensation

You may want to consider an open pay policy. An open pay policy allows workers to know how much their colleagues are earning. Such a policy can:

  • Stop speculation about pay—workers will know they are being paid fairly.
  • Make it clear that top performers are rewarded, which creates an incentive to work harder.
  • Stop meritless complaints about unequal pay.
  • Identify pay disparities so they can be fixed.


Ask for Help

The previous examples and suggestions are only a starting point. You can obtain further assistance from the resources listed below.


Where to go for Help

  • U.S. Department of Labor
    • Phone: 1-866-4-USA-DOL
    • (TTY: 1-877-889-5627)
  • Women’s Bureau
  • Department of Fair Employment and Housing, California
  • Office of Federal Contract Compliance Programs
  • Civil Rights Center
  • U.S. Equal Employment Opportunity Commission
  • National Labor Relations Board


Adapted from the Women's Bureau of the U.S. Department of Labor