Navigating Pay Equity Laws: Compensation Policy Advice for Nonprofits

Delaware. San Francisco. Massachusetts. Philadelphia. New York City. Pay equity legislation is popping up across the nation. These laws aim to correct gender- and race-based disparities in pay. In 2017 alone, 40 U.S. jurisdictions considered legislation to address the gender wage gap.^[1] 

Earlier this year, New Jersey passed the Diane B. Allen Equal Pay Act, bolstering protections against employment discrimination for protected classes.^[2] As of January 1, 2018, employers in California can no longer ask job candidates about their salary history—an effort to ensure wage discrimination does not follow people from position to position.^[3]  

Campbell & Company strongly supports the spirit of these policies. At the same time, we understand that nonprofit organizations need guidance when navigating this evolving landscape. We believe that legislation similar to the California salary history ban will continue to gain momentum nationwide.

For these reasons, our Executive Search team recommends that nonprofits adopt a proactive policy. Instead of asking for salary history during the hiring process, seek to understand the compensation expectations of each candidate.

Read on for six recommendations to help you implement this policy:

• Stay up-to-date on the compensation laws in your city and state. You can start by exploring a pay equity map. For example, this one is maintained by the workplace law firm Fisher Phillips.
• Institute an organizational policy to prohibit questions about salary history. Involve your Board in setting this policy and brief all staff to help them understand the new procedures.

• Ensure that all employees and consultants who interact with candidates—especially hiring managers and contracted search firms—understand what they can and cannot ask. This alignment is critical, particularly if you operate in a jurisdiction that prohibits questions about salary history.

• Conduct compensation analysis early in the search process and base salary range on the market if possible. Industry societies and associations (such as AFP in the fundraising space) often conduct compensation surveys, and sites like Guidestar and Glassdoor can provide insight into market salary range. 

  Executive search firms are also able to add value in this area; our practice regularly conducts compensation analyses for clients.

• As you develop questions and a fair salary range, ensure that the candidate’s skills, experience, and qualifications align with the role. If the candidate is a good fit for the position, they will more likely be interested and accept a pay range that reflects the current salary market.
• Be willing to negotiate on salary, especially if your organization may be unknowingly offering below-market compensation. Strong candidates are often fielding several job offers, so remaining flexible on salary is key to attracting and hiring the most qualified prospects.

• Consider posting a salary range for transparency. While this won’t be the right choice for all organizations, many can benefit from a direct approach. When salary ranges are shared upfront, candidates know what to expect, and there’s little room for miscommunication, particularly during the offer stage.

The coming months will, no doubt, bring new compensation bills. Now is the best time to begin adopting solutions that are progressive, timely, and reasonable—both for your organization and for your employees.

If you have questions, feel free to leave a comment below or contact me directly at dan.nevez@campbellcompany.com. 

[1] https://www.littler.com/publication-press/publication/youre-gonna-need-bigger-boat-pay-equity-initiatives-flood-state

[2] https://www.csemploymentblog.com/2018/04/articles/employment-policies-and-practi/nj-passes-diane-b-allen-equal-pay-act/

[3] https://www.shrm.org/resourcesandtools/legal-and-compliance/state-and-local-updates/pages/california-salary-history-ban-questions.aspx

Dan Nevez

About Dan Nevez Dan Nevez has more than 30 years of professional experience in higher education, arts and cultural institutions, and retained executive search. As a search consultant, he has...