The Future of Pay Equity Reviews and Diversity Reporting Under New Regulations

As new executive orders reshape workplace policies, many employers are wondering about the future of pay equity reviews and diversity reporting. While federal initiatives are being scaled back, pay equity remains a legal and ethical requirement. Companies that proactively monitor and address pay disparities will continue to foster transparency, mitigate risk, and maintain employee trust.

Legal Protections for Pay Equity Remain in Place

Despite the shifting regulatory landscape, federal and state laws still mandate fair pay practices. The Equal Pay Act of 1963 requires that men and women receive equal pay for equal work. Similarly, Title VII of the Civil Rights Act of 1964 prohibits compensation discrimination based on race, gender, and other protected characteristics.

“Pay equity is still a foundational requirement under federal law. While executive orders may shift some federal policies, the legal obligation for fair compensation practices remains firmly in place,” employment attorney Christy Kiely said during a recent SHRM webinar.

Additionally, many states have expanded pay transparency laws, requiring salary ranges in job postings and banning inquiries into past salaries. These laws ensure that compensation is based on job-related criteria rather than subjective factors that could reinforce historical inequities.

Why Pay Equity Reviews Are Still Essential

Even with changes to federal policies, pay equity reviews remain a best practice for ensuring compliance, reducing risk, and fostering employee confidence. Regular audits can help organizations:

• Identify and correct pay disparities before they lead to discrimination claims.
• Ensure compensation aligns with business goals and market benchmarks.
• Strengthen workplace culture by promoting fairness and transparency.

“Transparent and structured pay practices create stability and trust in an organization. Employers who prioritize equitable compensation structures will be better positioned to navigate future regulatory changes,” SHRM Chief Data & Analytics Officer Alex Alonso, Ph.D., SHRM-SCP, said during the recent webinar.

While the new executive orders discourage race- or gender-based hiring preferences, they do not prohibit pay equity evaluations. In fact, ensuring that compensation is truly merit-based aligns with the Trump administration’s emphasis on eliminating bias and favoritism in employment decisions.

Best Practices for Employers Moving Forward

To maintain fair and equitable compensation practices, employers should:

1. Conduct Regular Pay Equity Audits

• Analyze pay structures for disparities across demographics.
• Adjust salaries as needed to address unexplained wage gaps.

2. Implement Clear and Consistent Pay Scales

• Define salary bands based on skills, experience, and responsibilities.
• Train managers in fair pay practices to prevent bias in salary decisions.

3. Monitor Legal and Regulatory Changes

• Stay informed about state and federal pay transparency laws.
• Work with legal counsel to ensure compliance with evolving policies.

Takeaways for HR Leaders

While federal diversity policies may be shifting, fair pay remains a legal and business imperative. Companies that maintain structured pay policies, conduct regular audits, and promote transparency will continue to attract and retain top talent while fostering an equitable workplace.

“The best way to ensure compliance and trust is through proactive and transparent pay equity reviews. Fair compensation is not just a legal necessity but a business advantage,”  SHRM Linkage CEO Tamla Oates-Forney said during the webinar.