South Carolina state legislators are considering a bill that, if passed, would be the first to bolster all of the protections of the federal Equal Pay Act.
The proposed bill, “An Act to Establish Pay Equity,” asserts that South Carolina has one of the largest pay gaps in the nation. A 2017 study from the University of South Carolina’s Darla Moore School of Business found that women in South Carolina earn about 73 cents on the dollar when compared to men, and women of color earn 53 cents for every dollar earned by white men.
If the proposed bill passes, employers with operations in South Carolina could face civil liability of up to $10,000 per employee, as well as civil penalties of between $1,000 and $5,000 each violation for each employee or applicant affected.
The proposed legislation, currently being considered by the General Assembly’s House Judiciary Committee, addresses three categories:
- pay equity across all protected classes, not just sex or gender;
- prohibition against employers’ inquiries into wage history; and
- prohibition against an employers’ actions meant to restrict employees from discussing their wages with other employees.
According to South Carolina’s Women’s Rights & Empowerment Network (WREN), South Carolina would be the first state in the nation to pass a bill containing all of the protections in the proposed pay equity act.
Massachusetts passed an almost identical law, An Act to Establish Pay Equity, effective July 1, 2018, but it is limited to sex or gender.
Below are some of the highlights excerpted from the proposed “The Act to Establish Equal Pay”:
- Equal Pay: No employer shall pay wages to any employee at a rate less than the rate paid to employees of another race; religion; color; sex, including gender identity and sexual orientation; age; national origin; or disability status for comparable work, when viewed as a composite of skill, effort, and responsibility and performed under similar working conditions, except if such payment is made pursuant to a bona fide seniority system, merit system, system that measures earnings by quantity or quality of production or factors other than religion; color; sex, including gender 20 identity and sexual orientation; age; national origin; or disability 21 status, such as education, training, or experience.
- Wage Disclosure: Employers cannot require as a condition of employment for an employee to refrain from inquiring about, discussing, or disclosing his or her wages or the wages of another employee. It is an unlawful employment practice for an employer to discharge, formally discipline, or otherwise discriminate against an employee for inquiring about, discussing, or disclosing his or the wages of another employee. Employers cannot require an employee to sign a waiver or other document that purports to deny an employee the right to disclose or discuss his wages.
- Salary History Ban: Employers cannot rely on the wage history of an applicant for employment in considering the applicant for employment, including, but not limited to, requiring that the applicant’s prior wages satisfy minimum or maximum criteria as a condition of being considered for employment, with some exceptions.
The proposed legislation can be viewed here.
South Carolina is just one of the many states to consider passing equal pay legislation. In some states, such as Massachusetts and Oregon, conducting a pay equity audit can protect employers from significant financial impacts from either failing to meet regulatory requirements or lawsuits.
Organizations should consider having an equal pay audit performed to check in and see where they stand. Employers should seek to outsource to third-party specialists who focus on data consolidation and regulatory expertise. In addition to identifying any pay disparities, these specialists can also assist in correcting the issues identified.
To learn more about achieving pay equity, and to receive a free pay gap risk assessment, click here.