1. Title of Presentation A Roundtable Discussion: Pay Equity Issues
February 23, 2017
Title of Presentation
Jay Glunt (Pittsburgh)
© 2016, Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

2. Goals for Today
A confidential and candid learning experience in which every participant shares knowledge, shares experiences, and shares questions. And we all listen and learn.
Review the legal framework and obligations.
Develop a practical assessment of best practices and possible risk areas.

3. What is Pay Equity?
Compensation equity is an analysis as to whether individuals performing similar work are compensated substantially the same, or not.
If not – the analysis determines if there is an appropriate justification for the difference in pay.
There is no legal requirement that private sector employees be paid fairly – as long as a pattern of pay inequity is not related to a legally protected class.
External equity: organizations usually decide whether they want to be (a) one of the highest paying organizations (to attract and retain the best employees) or (b) be in the middle of the market (because it makes better financial sense given organizational goals)
Internal equity: addressed at both the individual and group level – internal comparison includes comparisons of similarly situated employees.
Courts disagree re what a similarly situated employee is, but at a basic level similarly situated employees are defined by similarity in the tasks performed and the conditions under which those tasks are performed.
Therefore, questions of internal equity concern whether differences in compensation between individuals who are performing the same or similar jobs make sense/are fair

4. Determining internal equity
Phase One. Make a list of similarly situated comparators.
Phase Two. Conduct a cohort comparison taking into account variables such as years of experience, performance, and education.
Phase Three. If there are statistically significant pay differences, determine if there are legitimate factors justifying the differences.
Talent recruitment
Talent retention
External equity: organizations usually decide whether they want to be (a) one of the highest paying organizations (to attract and retain the best employees) or (b) be in the middle of the market (because it makes better financial sense given organizational goals)
Internal equity: addressed at both the individual and group level – internal comparison includes comparisons of similarly situated employees.
Courts disagree re what a similarly situated employee is, but at a basic level similarly situated employees are defined by similarity in the tasks performed and the conditions under which those tasks are performed.
Therefore, questions of internal equity concern whether differences in compensation between individuals who are performing the same or similar jobs make sense/are fair

5. Enforcement Landscape
Key federal laws:
The Equal Pay Act (EPA) of 1963
Title VII of the CRA of 1964
Lilly Ledbetter Fair Pay Act of 2009
Key federal enforcement agencies:
The Equal Employment Opportunity Commission (EEOC) and
The Office of Federal Contract Compliance Programs (OFCCP) **also sometimes the DOJ

6. New EEO-I Reporting
W-2 data and time/hours data – employers are not submitting compensation data, but will be reporting the distribution of wages and hours by EEOC’s salary bands within EEO-1 category by race/ethnicity and sex
How will reports be used?
Data collection and reporting issues
First report due March 2018
EEOC and OFCCP are planning to develop a software tool that will allow their investigators to conduct an initial analysis by looking at W-2 pay distribution within a single firm or establishment, and compare the firm’s data to the aggregate industry or metropolitan-area data
For each employer and EEO-1 category, EEOC will analyze the percentage of men and women and percentage of each race/ethnicity group in each of the 12 pay bands
EEOC will compare the size of an employer’s compensation disparity with the size of similar disparities of employers in the same industry or metropolitan area
Employers with the greatest significant disparities will be targeted for investigation; this is not a tool used to prove the existence of discrimination

7. New State Pay Equity Laws
Several states have enacted new pay equity legislation
California
New York
Massachusetts
Maryland
Other states considering pay equity legislation
Philadelphia – first city to bar employers from asking potential hires to provide their salary history (effective May 23, 2017)

8. State Developments – Key Points
Potential for differing standards for determining pay equity
Protected classes – gender identity
Potential comparators - “substantially similar” work
Elimination of “same establishment”
Limited defenses and increased burdens of proof
Employees may discuss pay
Limitations on asking about/using prior pay info

9. Political Landscape What does Trump presidency mean?
Obama Administration Focus Bureau of Labor Statistics data showed that the average full-time salary for men to be $44,408 and for women to be $35, cents on the dollar
What does Trump presidency mean?

10. Public Relations White House Equal Pay Pledge – June 13, 2016
28 companies – commitment to conduct annual, company-wide pay equity analyses
As of August 2016 – 57 companies pledged
As of December 2016 – over 100 pledged
Companies considering publishing salaries/pay scales
Investor requests for reports on pay equity

11. Title of Presentation A Roundtable Discussion: Pay Equity Issues
February 23, 2017
Title of Presentation
Jay Glunt (Pittsburgh)
© 2016, Ogletree, Deakins, Nash, Smoak & Stewart, P.C.