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PAY COMPLIANCE, A 2024 HR AND EMPLOYMENT LAW FOCUS AREA

Updated: Jan 22

Pay overlaps with various other issues and directly intersects with DEI. The EEOC has asserted “protecting pay equity” as a 2024 top priority. Moreover, compliance with pay is especially going to continue to be an increasing area of focus as more and more states pass pay-related laws. Also, on the federal side of pay compliance, the U.S. Supreme Court kicked off the new year reviewing a case that could impact the way ambiguity in federal statues is interpreted; rather than deferring to expertise from federal agencies, the courts would forego relying on agency interpretations and instead judges would be given the authority to resolve ambiguity in federal statutes. And it’s not just pay that would be in scope with these federal statute interpretations; from an employment perspective, federal agencies such as the EEOC and DOL would be subject to the courts’ interpretations of agency rules and regulations.  SCOTUS’ decision is likely imminent as oral arguments were held last week. With the pending potential for judicial impacts on pay compliance combined with pending FLSA overtime eligibility changes and more state and local pay transparency bills anticipated, it is even more prudent that employers take heed to audit their pay practices as a top, strategic business priority.  It’s no exaggeration that all eyes are on pay.

 

In my work as an employment lawyer and my more recent work as an HR/DEI Advisor, I’ve witnessed a lot of eyes on pay by union workers, hourly workers eligible for overtime, misclassified salaried workers without overtime eligibility, and workers who believed their pay to be unfair based on perceived (and sometimes deemed real) discrimination. I also had an early exposure to safeguarding pay accuracy with a summer internship during all four years of college.  That exposure came through a Finance rotation at a major healthcare organization in Houston’s renown Texas Medical Center, whereby I rotated through Payroll, Accounts Payable, Treasury and the Office of the CFO as part of the internship.  During the internship, one of my favorite functions in finance was Payroll and one of my assigned tasks was to calculate FICA --- back then it was a manual calculation, and I was given a pencil with a full eraser attached along with a desk calculator.  After the payroll was run, another Intern and I would set up a pickup station to distribute paper checks to employees.  Although the Interns did not address discrepancies with pay, I knew that getting those FICA calculations accurate, among other calculations, was crucial to the payroll processes.

 

Subsequently, I went on to focus on pay-related legal issues under the Fair Labor Standards Act (FLSA) as an employment lawyer; these calculations were focused on overtime pay and it all started with a job duties analysis and a salary basis test to first determine overtime eligibility.  Unions often negotiated pay above and beyond overtime at one and one-half times the regular rate of pay.  Yet, during labor union negotiations, union workers almost never wanted to give up additional pay perks where double time and sometimes triple time their regular rate was calculated for incentive pay. I had the “hard” job of striking a “balance” in union negotiations to support management with not exceeding their payroll budget thresholds and averting a labor strike by not putting too many pay perks on the “chopping board”; when payroll budgets bust, the next consideration is layoffs, so that alternative further complicated my role as an employment lawyer.  Then there were also time and attendance and payroll technologies to address as overtime eligibility and pay updates had to necessarily be reconfigured to ensure pay accuracy.  When legacy systems were being retired and new ones installed, there were additional dual maintenance activities. The moving parts in managing pay are many and I’ve seen (and done) it all --- well, if not all, substantially all when it comes to driving compliance with pay practices.  The teams I work with at TULIP and the partners we collaborate with to do pay audits and pay equity analyses also have depth and breadth in compliant pay practices.

 

I recount the above background and experience the TULIP teams and collaborators have in pay matters for context on my continuous feed of information about compliant pay practices. I’m not new to this – I’m true to this (the same with DEI as my initial responsibilities were related to what was more commonly talked about as affirmative action and that was almost 20 years ago with EEOC Consent Decree compliance requirements).  Over the years I’ve reviewed, revised and drafted AAPs, conducted FLSA pay audits, led labor union negotiations with collective bargaining agreements, audited, assessed, and measured progress related DEI programs, developed DEI strategies, run pay equity analyses, led workplace investigations, and legally opined on various DEI/EEO and pay compliance issues. That said, compensation matters, including, but not necessarily limited to, pay accuracy, pay equity and pay transparency, are hot topics for 2024.  The TULIP team and I are staying apprised of new developments and are fully equipped, credentialed, and experienced to help address any workplace pay and/or overlapping DEI issues your organization is facing.  Click here to schedule a consultation with a TULIP Advisor to get started. https://calendly.com/tulipadvisory/30min.

 


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