Internal Equity?What Is

Choosing how much to pay youremployees can be tricky.

You want to be fair to your employees,and you want them to feel valued.

By using internal equity, you cancreate a pay system that maintainsemployee loyalty and happiness.

DEFINITION:

Internal equity is

the comparison of

employee positions

in your business to

ensure fair pay.

Employees should also perceive that they're

paid fairly compared to their coworkers.

Otherwise, they mightfeel unvalued and leave.

When you adopt a straightforward and honest

payment system, your employees will believe

that they are being paid fairly.

This boosts company morale andemployee loyalty.

So, how can you achieveinternal equity?

1. Consider the tasks of your employees.If two employees perform similar

tasks, they should earn similar wages.

2. Don't base employee wages solelyon job titles.

Two workers that have different titles but

perform similar tasks should have similar wages.

3. Consider educational backgroundsand relevant experience.

Similar tasks are the main consideration when

you set employee wages, but an employee's

education and work experience should be

accounted for.

4. Document all the factors that ledyou to your decision.

This will maintain transparency and fairness in

your business. If an employee ever questions

their wages, you'll be ready to answer.

There are 2 major laws

regulating internal equity:

The Equal Pay Act

The CaliforniaFair Pay Act

1.

2.

Equal Pay ActThis act states that men

and women who have

equal jobs must be

equally compensated,

and that you can't use a

person's sex to justify

higher wages.

California FairPay Act

This Act is more strict than theEqual Pay Act. Californiaemployers must pay equalwages to employees performingsimilar work.

The Act also allows employeesto openly discuss their wages.

Thanks forreading!

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