outsolve insights

Employee compensation plays a major role in employee satisfaction, engagement, and retention. If not managed carefully, compensation can also be a source of inequality and frustration. This is where pay equity analysis comes into play. A pay equity analysis is a review of an organization’s compensation practices, focused on identifying and addressing any disparities in pay between employees performing similar work.  

Standing up a pay equity and fair pay program can feel like navigating a labyrinth of data, policies, and entrenched practices. You face the daunting task of balancing budget constraints, regulatory compliance, and the urgent need to attract and retain top talent. All the while, you know that unaddressed pay inequities can erode employee trust, fuel turnover, and tarnish your company’s reputation.

If recent federal changes have you questioning pay equity’s importance, consider this: states are stepping up enforcement, and your employees are watching. In 2025, staying proactive is key. 

Not only that, but under the federal Equal Pay Act of 1963 and Title VII of the Civil Rights Act,employers are prohibited from pay discrimination on the basis of sex, gender, race, or ethnicity. These two laws work together and require that any pay differences are justified by legitimate, non-discriminatory factors such as merit, seniority, quantity or quality of work, or a factor other than sex and race.

Post Updated: December 17, 2024:

New Jersey's Pay Transparency Law Takes Effect June 2025

New Jersey has joined the growing list of states advancing pay transparency with Governor Phil Murphy signing Senate Bill 2310 into law effective June 1, 2025. This law will require employers (including consulting firms, job placement, referral, and employment agencies) with at least 10 employees over 20 calendar weeks to disclose salary ranges and general benefits in job postings, whether internal or external.

In a landmark move, the Massachusetts legislature has passed a significant bill promising to bring a new level of transparency to the hiring process. The bill, known as an Act Relative to Salary Range Transparency, requires employers with 25 or more employees to disclose salary ranges when posting job positions. This legislation is set to make Massachusetts the eleventh state to mandate such pay transparency, a step that many believe will help close the gender and racial wage gap.

We've made it easy for you to navigate what steps to take: skip right to Actions Massachusetts Employers Should Take Now

As an HR leader, embarking on the pay equity journey isn't just a regulatory obligation — it's an opportunity to align your human resources practices with your organization's deepest values of fairness and transparency. This journey will challenge you to scrutinize and refine your compensation strategies, ensuring that every employee's pay is not only compliant with the law but is also a true reflection of their value and contribution to the company.

Join OutSolve on Wednesday, July 17 for a live webinar, "Laying the Groundwork: Building Pay Equity from the Start" as experts discuss how to build a strong foundation for pay equity in the workplace. Attendees will experience an insightful webinar dedicated to establishing a foundation of pay equity within their organization from the start. Our compensation experts will dive into the essentials of pay equity, providing you with actionable strategies and best practices to ensure that your compensation framework is fair and unbiased from the outset.​

The March release of the EEO-1 Component 2 dashboard by the Equal Employment Opportunity Commission (EEOC) has sparked a new wave of interest in U.S. pay gaps and potential concerns for businesses. This new data portal allows users to explore pay data from large employers across various industries, broken down by race, ethnicity, gender, and job category. The data from 2017 and 2018 EEO-1 collections offers unprecedented transparency into workforce demographics and compensation practices.

Discussions surrounding gender disparities in various aspects of life have become increasingly prevalent. One critical area where these disparities manifest is in income distribution. On March 12, 2024, the Equal Employment Opportunity Commission (EEOC) released a data dashboard featuring the 2017 and 2018 EEO-1 Component 1 pay data. Although not current, this data provides valuable insights into the persistent challenges faced by women in the workforce, shedding light on a reality that demands immediate attention and action.

President Biden's Executive Order 14069, issued on March 15, 2022, directed the Federal Acquisition Regulatory Council (FAR) to explore limiting or prohibiting Federal contractors from considering job applicants' or employees' past compensation when making hiring decisions. To this end, on December 4, 2023, the FAR submitted a proposal titled "Pay Equity and Transparency in Federal Contracting" to the Office of Management and Budget (OMB) for approval. The proposal was approved by OMB on January 29, 2024, and the FAR released the Notice of Proposed Rulemaking (NPRM), which was published in the Federal Register on January 30, 2024.